Pan Asia has finally sealed a deal to sell its Indonesian thermal coal project for $US4.6 million — 18 months after first announcing the deal.

But it’s had to take a hair cut on the deal: the original price was about $US6 million after costs.

The struggling minnow (ASX:PZC) told investors late yesterday that it had now struck a binding deal with Toplus for the sale of its 75 per cent stake in its thermal coal business, PT. Transcoal Minergy (TCM).

Pan Asia will issue 30 million shares priced at 0.2c each to its Indonesian joint venture partners to acquire their 25 per cent stake so it can sell 100 per cent of TCM to Toplus.

The company originally signed a heads of agreement in May last year for the sale of TCM to Glory Merry. Toplus is an associate of Glory Merry.

But the volatile coal market put a dampener on things and Pan Asia has had to accept less than it would like for the sale.

“During this time Pan Asia has continued to experience difficult operating conditions in Indonesia, with progress on our forestry permits and port access proving elusive,” chairman Gary Williams said.

“Pan Asia, as an Australian public company, is limited in how it can deal with local Indonesian issues to facilitate on ground approvals (including forestry permits) and gain critical access to port capacity, meaning that the value of TCM is otherwise significantly impaired.”

Mr Williams said while the sale price was lower than originally proposed, “Glory Merry and Toplus have made significant concessions”.

The buyers have agreed to waive the conditions precedent outlined in the May 2017 heads of agreement — the most significant of which was the requirement for Pan Asia to obtain forestry permits and port access, which it had been unable to do.

Pan Asia, which has been suspended from trading since February, wants to get out of the volatile low-grade thermal coal business in Indonesia and into high-grade thermal and coking coal assets in Australia.

The company is working to complete the acquisition of New Emerald Coal, which has coal projects in Queensland’s Bowen Basin.

New Emerald was placed in receivership in May this year and Pan Asia is working with creditors to reach a deed of company arrangement.

The global push to reduce emissions has seen a growing demand for higher quality coal.

Higher quality coal means power stations can burn less to produce the same amount of energy.

The prices for high quality 6000 kilocal coal – which Australian miners are known for – have risen, while prices for lower grade 5500 kilocal coal have fallen since June.

This divergence between prices for higher and lower quality coal continued to grow in the September quarter.