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Resourcehouse believes $60b coal deal binding

Updated: 2010-02-10 09:43
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PERTH/HONG KONG: IPO candidate Resourcehouse Ltd said it believed it had signed a binding $60 billion coal sales deal with China Power International Holding Ltd, though the Chinese company said it was "just a framework".

Clive Palmer, the founder of Resourcehouse, said the $60 billion headline contract figure was based on its forecast of coal market prices over the life of the agreement to sell 30 million tonnes of coal a year for the next 20 years.

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China Power International Holding Ltd said the coal sales and purchase deal did not involve any concrete prices.

"Coal sales and purchase contracts will depend on further negotiations," the company said in a press release translated from Chinese.

"Palmer has met with officials of China Power International Holding Limited today and confirmed their commitment to work together at a lunch held today at the State Guesthouse in Beijing," Resourcehouse said in an e-mailed statement.

At the weekend a Resourcehouse statement mistakenly said the company had an agreement with China Power International Development Ltd (CPID), which had led to a denial by that company. CPID is in fact the parent company of China Power International Holding Ltd.

Palmer is preparing Resourcehouse for investors seeking a stake in its roughly $3 billion Hong Kong initial public offering.