Bluewaters sold: Japanese owners by Christmas

SOLD: after years of painful negotiations, the Bluewaters power stations have been sold.
SOLD: after years of painful negotiations, the Bluewaters power stations have been sold.

THE sale of Bluewaters power stations has been welcomed in Collie, though questions remain.

The sale is expected to be completed by Christmas. Two Japanese energy corporations,

Sumitomo and Kansai Electric, paid more than $1 billion to secure Griffin Power’s Bluewaters I and Bluewaters II.

Administrators KordaMentha, reportedly, would not budge on that price during the administration period.

The buyers are said to have given a little on coal price — an extra $7 a tonne — and agreed to help Griffin Energy (the coal operation) upgrade its severely rundown plant.

Griffin group administrator Scott Kershaw said on that beside cash on completion, the sale agreements allow Griffin Coal to buy 150MW of electricity at a predetermined price in the future.

After completion, “we will determine the appropriate means of monetising the asset, which has the potential to be of significant value to Griffin Energy (the mine) and its creditors”, Mr Kershaw said.

CFMEU mining and energy section secretary Gary Wood said he hoped the deal would mean a more sustainable contract for Griffin Coal, both on price and tonnages.

Griffin Coal urgently needed more cash flow to pay its contractors and suppliers and get the mine working properly, he said.

The option to buy power could be useful in the future. This was a costly commodity and it could be useful if the company decided to turn to electric shovels for the Muja South expansion.

He reiterated that his union’s prime interest in the Bluewaters sale was that Griffin Coal secured a sustainable contract and could settle with local businesses and contractors queuing up to be paid.

Shot firing had stopped at the mine because the company had not paid its bills, Mr Wood said. Clothing suppliers, hearing protection suppliers, mechanics and safety equipment suppliers all had outstanding bills.

“You can’t trade like that,” Mr Wood said yesterday.

He also criticised the company for predicting a hugely increased workforce under the present circumstance. “That’s beefing it up and misleading people,” he said. It was aimed at investors.

Mr Wood did not know if Transfield Worley Power Services would continue running power stations or whether the new owners would make other arrangements.

Mr Kershaw said a number of conditions needed to be met despite the sale contracts having been exchanged.

“Over the coming weeks we will be working with a range of stakeholders to conclude the restructure of Griffin and complete the sale.

“Our goal is to transition Griffin Power to robust owners with long-term investment perspectives.”

Griffin Power’s security of coal supply was enhanced via step-in rights. “There had been some issue with supply and price of coal,” another KordaMentha spokesman said.

“Some technical contract lease provisions are to be signed.”

Two of the three major Griffin Power customers will be able to extend power purchase agreements.

Collie Chamber of Commerce and Industry chief executive officer Richard Jackson said the sale was excellent news, taking away doubt and restoring confidence in the community.

Collie shire president Wayne Sanford said it seemed a positive outcome after a troubled period. “I am very happy the parties have found a way through,” he said yesterday.

Collie-Preston MLA Mick Murray said he was very happy to see finalisation of long and painful negotiations.

“It will bring back a degree of security to the electorate and the coal company,” Mr Murray during a working visit to Hong Kong yesterday.

He described the reported coal price increase as “very small” but said it was about security for the industry and town, providing job security in many workplaces.

“There is a little way to go with export and other issues but the extra money to help Lanco buy new machinery should help boost production,” Mr Murray said.

Both Griffin Coal and the new owners were contacted for comment but had not responded before the Mail went to press.

This story Bluewaters sold: Japanese owners by Christmas first appeared on Collie Mail.