Vale announced Thursday that has entered into an agreement to complete a purchase option from June 2010 to acquire an additional 24.5 percent stake in the Belvedere coal project from Aquila Resources Limited. The purchase price of A$150 million (US$156 million) is equivalent to the fair market value recently determined by a third party expert engaged by Vale and Aquila.
The acquisition is subject to Queensland Government indicative approvals. As an outcome of this transaction, Vale will increase its participation in Belvedere to 100 percent. Vale also agreed to settle Belvedere litigation and disputes with Aquila for A$20 million (US$21 million).
Overall, Vale will have paid a total of approximately US$338 million for 100 percent of Belvedere. The Belvedere underground coal project is a future growth option located in the southern Bowen Basin region, near the city of Moura, in the state of Queensland, Australia. The project is still in early stage of development and, consequently, its implementation is subject to Board approval. According to preliminary estimates, Belvedere has the potential to reach a production capacity up to 7 million metric tons per year of mainly coking coal.