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UPDATE 1-Mitsubishi exits thermal coal sector, sells stakes in Australia mines

Published 18/12/2018, 07:50 pm
© Reuters.  UPDATE 1-Mitsubishi exits thermal coal sector, sells stakes in Australia mines
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* Mitsubishi to sell 31 pct Clermont stake to Glencore , Sumitomo

* Mitsubishi to sell 10 pct stake in Ulan mine to Glencore

* Signals Mitsubishi exit from thermal coal mine operations (Adds details and background)

By Yuka Obayashi

TOKYO, Dec 18 (Reuters) - Japan's Mitsubishi Corp 8058.T said on Tuesday it will sell its stakes in two Australian thermal coal mines for A$750 million ($539 million), a move that means its exit from upstream thermal coal amid growing pressure from environmental activists.

The stake sales comes as a growing number of companies and pension funds across the globe are divesting assets or companies that generate revenues from fossil fuels, particularly coal.

Thermal coal, used to power turbines to produce electricity, has fallen out of favour with investors worried about pollution and greenhouse gases.

Mitsubishi will sell its 31.4 pct stake in Clermont coal mine to a joint venture between Glencore GLEN.L and Sumitomo Corp 8053.T , and its 10 pct stake in Ulan coal mine to Glencore, it said in a statement.

The deals are aimed at optimising its asset portfolio, Mitsubishi said.

For Mitsubishi, which decided to sell its interest in two other thermal coal mines in Australia last year, the latest deals will mean an exit from thermal coal operations, although its coking coal operation will remain a key asset for the trading house.

The Clermont deal, expected to be completed in 2019, will bring the Glencore-Sumitomo joint venture's stake in the mine to nearly 81.5 percent, Sumitomo said in a separate statement.

"The acquisition will allow us to continue stable supply of high quality thermal coal to our existing customers, including Japanese utilities," a Sumitomo spokesman said.

Sumitomo's share of the Clermont purchase means it will pay about 23 billion yen ($204 million) for a 15.7 percent stake in the mine, he said.

Sumitomo has no plans to invest in any new development projects for thermal coal mines, given the serious concerns over climate change, the spokesman said.

($1 = 1.39 Australian dollars)

($1 = 112.5800 yen)

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