Wesfarmers has paid $70 million for a Bowen Basin coal deposit that sold for more than $334 million less than four years ago

Conglomerate Wesfarmers has snapped up a coal deposit in Queensland for $70 million after it was sold for more than $334 million in 2010.

The owner of Coles supermarkets, Wesfarmers said it had agreed to buy the Mineral Development Licence 162 in the coking coal-rich Bowen Basin from US giant Peabody Energy.

Macarthur Coal, which was later acquired by Peabody, bought a 90 per cent stake in the deposit for $334.35 million from the Queensland government-owned Stanwell Corporation, in a sign of how far coal prices have fallen in the last three years and continue to fall.

Wesfarmers also announced on Monday that it would lower metallurgical coal prices from its Curragh mine by 5.0 per cent for the current quarter to $US138 ($A157.74) a tonne, which is more than 17 per cent down on the $US167 prices were at in the June quarter last year.

Despite that, Wesfarmers resources managing director Stewart Butel said the new acquisition reflected the company’s confidence in the longer-term outlook of Curragh’s export coal business.

The deposit is located close to Curragh mine, and its 67 million tonne reserve will add about 29 per cent to the coal to be mined and processed there and add to the mine life, the company said.

Wesfarmers increased total production from its two mines in the December quarter to 3.7 million tonnes (about half thermal and half metallurgical) from 3.5 million tonnes in the previous year.

Full year production increased about 1.0 per cent to 14.2 million tonnes but metallurgical was down 5.7 per cent, which was blamed on interruptions from Cyclone Oswald early in the year.

Shares in Wesfarmers, which is currently among the ASX’s 10 largest stocks, were 20 cents weaker at $43.50 at 1600 AEDT.