New World Resources Plc (NWR) will seek to buy coal mines, possibly including in the U.S., as part of the Czech producer’s plans to double sales to European steelmakers such as ArcelorMittal (MT), its biggest customer.
“We’re looking at buying stakes in other producing units where we would have a controlling ability,” Chairman Gareth Penny said. The company may consider mines in the U.S., he said.
NWR last week said it plans to boost coking coal sales to 10 million metric tons a year by 2017. The company, with about 5 million tons of output last year, aims to boost production from its own mines, buy coal from other companies and acquire mines.
“We are only interested in things that produce the kind of coal that we need for our customers in our region,” Penny said. “We seek to be Europe’s premier miner and marketer of metallurgical coal. We cannot go off piste in terms of any kind of acquisition or trading business.”
NWR is counting on rising demand from steelmakers and a rebound in prices after coking coal slumped 30 percent last year as Europe’s economic crisis sapped demand and Chinese growth slowed. Penny, a former chief executive officer at De Beers, expects coal prices to rise about 20 percent this year.
The company has no plans to revisit a bid to combine with Ferrexpo Plc (FXPO), a producer of iron ore in Ukraine. NWR abandoned an offer to buy 25 percent of Ferrexpo from the controlling shareholder now known as BXR Group Ltd. in 2009. Ferrexpo runs mines in Ukraine and is led by billionaire Kostyantin Zhevago.
“It’s not something we’re considering now,” Penny said. “We want to be a pure play coal mining company. To be diluted with iron ore producers is not something we’re currently thinking about.” The company also produces thermal coal.
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