Xstrata Coal acquired the Sukunka hard coking coal deposit from Talisman Energy for US$500 million. Sukunka is located in the Peace River coalfields of northern British Columbia and marks the third acquisition that Xstrata Coal has made in the region in the last year.
Once developed, Sukunka will meaningfully increase Xstrata Coal's exposure to hard coking coal and unlock synergies with its neighbouring First Coal and Lossan assets in the Peace River coalfield.
The Sukunka property has a coal resource of 236 million tonnes, and Xstrata Coal's technical studies indicate the potential to realize further value from the resource. Demand for coking coal, which is used in steel production, has increased over the past several years due to the continued industrialization and urbanization of emerging economies.
Xstrata Coal was represented by Bennett Jones LLP, with a team comprising Ken Klassen, Eden Oliver, Russel Drew and Rami Chalabi in Toronto; and Vivek Warrier, Marianne (Chuck) Davies and Duncan McPherson in Calgary.
Talisman was represented by Timothy Kessler, Senior Counsel, and Jonathan Horlick, VP Legal, and by Lawson Lundell LLP, with a team comprising William Laurin (oil & gas) in Calgary; and Khaled Abdel-Barr (mergers and acquisitions and mining) in Vancouver.