Straits Asia Resources to buy coal assets from its parent

Straits Asia Resources said Fri it has agreed to buy US$100.3 million in coal assets from its parent, Straits Resources Ltd.

Straits Asia said in a statement it will purchase a project in Madagascar and another in Brunei from Straits Resources as part of a previously announced plan to transfer all of the parent's coal assets to the Singapore-listed company.

Straits Asia is expected to seek a dual listing in Australia at a later date, when Perth-based Straits Resources may distribute its stake in the company to investors in the form of locally-traded shares.

Following the restructuring, Straits Resources plans to focus on its core business as a base metals company.

Currently, all of Straits Asia's coal assets are in Indonesia. It operates 2 mines there that are expected to produce about 9 m metric tons this year and 11 m tons next year.

Straits Asia said the Madagascar assets have an exploration target of 300 m to 500 m tons of coal. It expects to be able to excavate three to 5 m tons of coal from the project annually, based on preliminary estimates.

The Brunei property is considered to be prospectiv" and has properties similar to coal seams in Kalimantan, Indonesia, Straits Asia said.