Major coal transaction is underway in Indonesia

A major coal transaction is underway in Indonesia. One company that controls two major coal producers in the country is about to leave the business for another transaction, buy Freeport shares.

"For sure there will be a transaction, but I don't know the buyer," said one investment banker in a SMS today.

The company has close relationship with the group which keen to acquire copper and gold mining giant PT Freeport Indonesia.

"They need money to buy Freeport shares. The buyer, Japanese trading company, seems to offer huge amount of money that the company can't resist. The amount may well above US$2 billion," said another banker.

Credit Suisse First Boston is reportedly handle the transaction on the buyer side, while JP Morgan is advising the seller.

Other sources said Marubeni Corporation, one of the largest coal traders in the world, is the company involved in the transaction.

PT Bumi Resources Tbk, which controls PT Kaltim Prima Coal and PT Arutmin Indonesia, was reportedly plan to acquire shares of Freeport Indonesia. Meanwhile, Marubeni owns shares in coal mining operations in Australia and Canada.

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