Straits to buy S'pore firm

Straits to buy S'pore firm

SYDNEY (Reuter): Gold and copper miner Straits Resources Ltd said yesterday it had agreed to buy Singapore's Straits Sebuku Pte Ltd for US$20.6 million.

Straits Sebuku owns large coal interests in Indonesia, the company said.

Straits Chairman Bill Beerworth said the deal would double the size of the company's projected revenue and cash flow.

"It is expected that a full year profit contribution of up to A$7 million after tax per annum will be realized from Sebuku in 1998/99," Beerworth said.

Straits chief executive Brian Rear said the Sebuku coal acquisition provided an appropriate long term replacement for the Giralambone copper mine.

"We have been aware for some time of the need to move away from a sole dependence on copper which can be vulnerable to changes in market conditions," Rear said.

He said a feasibility study of Sebuku had defined coal resources of 18.7 million tons and mineable in-situ reserves of 15.5 million tons of thermal coal.

Product quality would average 0.9 percent sulfur, 8.5 percent to 9.5 percent ash and 5,910 to 5,975 kilocalories per kg.