New Hope on track for larger Bengalla stake

Image: Bengalla Mining Company

New Hope has sealed the deal on its acquisition of Wesfarmers’ stake in the Bengalla coal operation in the Hunter Valley, New South Wales.

The acquisition has taken New Hope’s stake in Bengalla to 70 per cent, and JV partner Taipower’s to 20 per cent, after both companies reached an agreement to participate in Wesfarmers’ sale of its 40 per cent interest.

New Hope has obtained a $600 million debt facility and $300 million bond facility to fund this acquisition.

The company will also allocate the loan facilities to advancing New Hope’s medium-term growth projects, including the New Acland coal mine’s stage three development in Queensland and potential development of the Burton Lenton coal project also in Queensland.

Yet, New Hope plans to take its acquisition of Bengalla further – the company has agreed to purchase Mitsui’s 10 per cent stake for $215 million, which will be financed with a combination of cash and debt.

The acquisition will take New Hope’s holding interest to a 80 per cent upon completion. This is expected to occur in the first quarter of 2019.

Bengalla is a single pit open cut mine with a JORC reserve of 269 million tonnes as of 2014, purchased from Rio Tinto in 2015 months after its mining lease was extended for an additional 24 years.

The mine’s ownership was initially split among New Hope (40 per cent), Wesfarmers (40 per cent), Mitsui (10 per cent) and Taiwan Power Company (10 per cent).