China boosts holding

Written on the 17 April 2009

 

THE China International Trust and Investment Corporation (CITIC) has raised its stake in Macarthur Coal by 3 per cent as it edges closer to holding almost a quarter of total shares in the Queensland company.
Macarthur Coal chief development officer Shane Stephan says he is not surprised given the current share price levels. 
“There is a long standing relationship between CITIC and Macarthur Coal so it’s not surprising that CITIC has chosen to increase their holdings by 3 per cent, and it’s not particularly surprising at those share price levels,” says Stephan.
“CITIC has been a long-term foundation holder right from when Macarthur Coal started, and they also hold 7 per cent in the Coppabella and Moorvale mines.”
“They are also one co-venturer with Macarthur Coal in a number of exploration tenements in Queensland.” 
The performance of the coal industry will depend heavily on the impacts of stimulus packages globally for the manufacturing industry, which will affect demand for the steel industry – the main customer for Macarthur Coal.
“Share prices for coal tend to be very volatile this time of year when coal prices are being negotiated,” he says.
“The outlook is that it’s going to be a reasonably tough year.”
Commentators have speculated that the Brisbane-based company has negotiated pulverised coal injection coal contracts with Japan’s Nippon Steel at a better price than expected, but this could still be in the range of a 63 per cent cut on last year’s price.  

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