Xstrata PLC, the world's largest exporter of thermal coal, said it plans to sell 20 percent of its stake in the A$6 billion ($6.4 billion) Wandoan Coal Project in Australia, The Wall Street Journal reported Tuesday.
Xstrata owns 75 percent of Wandoan in Queensland state's Surat Basin. It has hired the investment banking firm Macquarie Capital to seek buyers. Itochu Pty. Ltd. and Sumisho Coal Australia each hold 12.5 percent ownership.
The Wandoan Coal Project is a proposed thermal coal mine to be built west of the Wandoan township in Queensland. The mine, which has an expected life of at least 30 years and will produce 30 million metric tons of coal annually, will become a key supplier of Asian power generators.
The Queensland government approved the project in November 2010, while the Australian federal government approved it in March 2011.
Xstrata, based in Zug, Switzerland, is waiting for a ruling by the Queensland Land Court on whether it can receive a mining license. The company produces coal, copper and nickel.
Some environmentalists are concerned about the project's greenhouse gas emissions, but Xstrata said it addressed these issues with environmental impact statements.
The project will create up to 1,300 jobs and will help boost local infrastructure and small businesses around the region, Xstrata said.
Xstrata plans to merge with Glencore International AG, a raw-materials trader based in Baar, Switzerland. The combined company would have a market capitalization between $80 billion and $90 billion. It is unclear whether the merger will affect terms of a deal for Wandoan.