BHP sells QLD coal mines to Stanmore for $1.8bn

BHP

Source: BHP

BHP has agreed to sell its 80 per cent share in BHP Mitsui Coal (BMC) to Stanmore Resources, offloading two Queensland coal mines and associated infrastructure.

BMC owns the Poitrel and South Walker Creek metallurgical coal mines, plus Red Mountain Infrastructure, and the Wards Well development.

The sale will see up to $US1.35 billion ($1.82 billion) change hands, with $1.1 billion to occur upon completion of the share sale and purchase agreement.

BHP Minerals Australia president Edgar Basto said the deal continued the company’s transition from large carbon emitting operations.

“This transaction is consistent with BHP’s strategy, delivers value for our company and shareholders and provides certainty for BMC’s workforce and the local community,” Basto said.

“South Walker Creek and Poitrel are well-run assets that have been an important part of our portfolio for many years, and we are grateful for their contribution to BHP.”

Poitrel and South Walker Creek have a combined metallurgical coal production of about 10 million tonnes per annum and marketable reserves of more than 135 million tonnes, according to Stanmore.

Golden Energy and Resources (GEAR) – Stanmore’s parent company – were very supportive of the deal, according to Stanmore chief executive officer Marcelo Matos.

“This is an exciting and transformative acquisition for Stanmore, and we are fortunate to be able to rely on the full support received from our controlling shareholders, GEAR as well as the Sinar Mas Group, to successfully execute this deal,” Matos said.

“This transaction will see the company become one of the leading metallurgical coal producers globally and provide Stanmore with a portfolio of Tier 1 assets.

“(It brings) significantly increased reserves and resources base and assets with an expected mine life exceeding 25 years production, positioning the company for substantial cashflow generation and future growth opportunities.”

The deal will increase Stanmore’s metallurgical coal production by a multiple of 5.6, while its coal reserves will increase by a multiple of 4.2.

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