UPDATE 1-Canada's Sherritt to sell coal business for C$946 mln

Tue Dec 24, 2013 10:22am EST
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* To sell royalty portfolio, stake in coal development assets to Altius Minerals for C$481 mln

* Westmoreland Coal will buy operating coal assets for C$465 mln

* Sherritt expects to record loss of about C$460 mln on the disposal

Dec 24 (Reuters) - Canada's Sherritt International Corp said on Tuesday it would sell its coal business for C$946 million ($893 million) to focus on its nickel and oil businesses.

Sherritt said it would sell its entire royalty portfolio and stake in coal development assets to a group led by mining company Altius Minerals Corp for C$481 million.

Westmoreland Coal Co will buy Sherritt's operating coal assets - Prairie and Mountain Operations - for C$465 million.

"(The sale) ... gives us the capacity look at more opportunities to grow those businesses where we feel we have a real differentiating experience," Sherritt Chief Executive David Pathe said in an interview to Reuters.

Sherritt's coal business has been struggling due to weak customer demand that has pulled down thermal coal prices. Coal production volumes at both its Prairie and Mountain operations fell in the third quarter.

Demand for thermal coal, used to generate electricity, has weakened in North America as power producers turn to cheap, abundant supplies of shale gas.   Continued...