Rey Resources has struck a deal to sell its Duchess Paradise coal project in the Kimberley to Hong Kong's Crystal Yield Investments for $21 million.
Managing director Kevin Wilson said weaker coal prices have forced the company to shift its focus towards developing its Canning Basin oil and gas prospects in the Kimberley region instead, The West Australian reports.
"While we also intend to continue the development of our coal exploration assets in the Canning Basin, during this period of sustained lower thermal coal prices, we believe the best interest of shareholders is served by this transaction," he said.
The company said it expects to cop a $480,000 loss on the transaction.
The deal remains subject to Foreign Investment Review Board and shareholder approval as well as due diligence.
It is estimated the project would have a 20 year mine life at an export rate of up to 25 million tonnes per annum.
The project is expected to employ about 300 people during construction and includes a coal handling and preparation plant and support infrastructure.