New Hope consolidates Bengalla ownership with $215m Mitsui deal

New Hope Corporation has secured deals with minority partners Taipower and Mitsui to cement a controlling stake in the Bengalla thermal coal mine in New South Wales.

The Bengalla Mining Company joint venture was initially split 40-40 between New Hope and Wesfarmers and 10-10 between Mitsui and Taipower.

In August, New Hope announced it was planning to purchase Wesfarmers’ 40 per cent share of the Bengalla joint venture for $860 million, taking New Hope’s ownership of the JV from 40 per cent to 80 per cent.

New Hope has now reached an agreement with Taipower for the company to participate in the Wesfarmers sale (due for completion in early December), meaning New Hope will own 70 per cent of Bengalla while Taipower will increase its share to 20 per cent.

Mitsui, which waived its right to earn in on the transaction, will sell its 10 per cent share in Bengalla to New Hope for $215 million, meaning New Hope will own 80 per cent of the JV.

New Hope has entered a $600 million debt facility and $300 million bond facility in order to raise the required funds to purchase both Wesfarmers’ and Mitsui’s shares in Bengalla.

These funds are also expected to fund medium-term growth for the $900 million stage three expansion of the New Acland coal mine in Queensland.

New Hope managing director Shane Stephan said, “acquiring a controlling interest in Bengalla demonstrates New Hope’s long term positive outlook for the global export thermal coal market and our commitment to the Bengalla mine and its employees.”