South32 has entered a US$200 million ($260 million) agreement to acquire Peabody’s Metropolitan Colliery along with a 16.67 per cent interest in the Port Kembla Coal Terminal.
The Colliery, around 30km north of Wollongong, NSW, produced two million tons of saleable coal in 2015. In the same year, Peabody cut production and jobs at the mine, transitioning to a five-day production schedule as part of a plan to “increase productivity, improve cash flows and optimise production at Peabody’s Australia operations given current market conditions”.
South32 CEO Graham Kerr said the Metropolitan Colliery is a “natural fit” for the company’s portfolio and is consistent with their strategy of investing in high quality operations.
“The mine’s recently upgraded infrastructure and close proximity to Illawarra Metallurgical Coal will enable us to further optimise performance and unlock unique blending and resource synergies,” he said.
Peabody Energy filed for Chapter 11 bankruptcy in April this year, later announcing a new business plan for the future of their Australian assets which may keep the company afloat.