HALIFAX – Xstrata Coal is looking to sell its 75 per cent stake in the Donkin coal project in Nova Scotia that it shares with Erdene Resource Development Corp. (TSX:ERD), the companies said Thursday.
Erdene holds a 60-day right of first refusal on the sale by the subsidiary of Swiss global mining giant Xstrata PLC.
The Donkin project is under development and a full environmental approval is expected earlier next year.
It is estimated the mine will produce 2.75 million tonnes per year and will employ about 300 people with production hoped to start in 2014.
In addition to its interest in the Donkin project, Erdene is active in Mongolia and has industrial mineral projects in North America.
Erdene stock was down 1.5 cents at 39.5 cents on the Toronto Stock Exchange before trading was halted pending the announcement.
Last month, Xstrata sold a 25 per cent stake in its operation in B.C. to JX Nippon Oil & Energy Corp. for US$435 million.
Xstrata Coal British Columbia will retain a 75 stake in the joint venture that will own coking coal assets in B.C.’s Peace River Coalfields.
Xstrata is one of the world’s largest producers of copper, thermal and metallurgical coal, ferrochrome, zinc and nickel and also produces silver, lead, platinum, gold, cobalt and vanadium.