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Japan’s Itochu Stake in Australian Mine

February 16, 1996

SYDNEY, Australia (AP) _ Japanese trading company Itochu Corp. has agreed to buy a coal project in Australia’s Queensland state for about $150 million, it was announced Friday.

MIM Holdings Ltd., which operates the Newlands and Collinsville coal mines and the Abbot Point coal-loading facility, said Itochu will pay 150 million Australian dollars to cover debts attached to the operation and 50 million Australian dollars to Italy’s Agip SpA, which owns a 25 percent stake.

The coal operations were 75 percent owned and operated by MIM until 1991, when the business defaulted on debts to a consortium of Australian banks who then took control.

The group of banks selling the NCA businesses are owed about 700 million Australian dollars, according to an MIM spokesman.

MIM said its agreement with Itochu includes an 18-month option to retain its 75 percent stake in the coal project under a new financing scheme with Itochu.

In a separate deal, MIM said it will pay 6 million Australian dollars for Agip’s 25 percent interest in the Suttor Creek coal project. MIM said it has begun a feasibility study into the possible development of the Suttor Creek deposit and its eventual integration into the NCA project.

MIM said the development of Suttor Creek will likely cost about 133 million Australian dollars.