Stanmore Resources has struck an agreement to acquire South32’s 50 per cent stake in the Eagle Downs coking coal mine in the Bowen Basin region of Queensland.
The project has been held in a joint venture with Chinese steel giant Baowu since South32 acquired half of the project in 2018.
Stanmore said it is also in talks with Baowu to acquire a further 30 per cent of the project, and has signed a term sheet with the aim of restructuring the venture.
The coal miner has various projects and operations neighbouring Eagle Downs, including the South Walker Creek mine and Isaac Plains Complex.
“The acquisition of Eagle Downs is consistent with Stanmore’s ambition to expand its footprint in Queensland’s premium metallurgical coal basin,” Stanmore chief executive officer and executive director Marcelo Matos said.
“Eagle Downs is a high-quality project underpinned by a substantial resource base, which provides an exciting development opportunity that is complementary to our broader portfolio and in close proximity to our existing operations.
“We believe we can bring our strong technical capabilities, as well as unique infrastructure and logistics portfolio, which will enable Stanmore to unlock the full value potential of Eagle Downs and provide a capital efficient pathway for any future development decision.”
Stanmore has offered $US15 million upfront, with $US20 million to be paid from the first 100,000 tonnes of longwall coal being mined.
A capped royalty of up to $US100 million is also to be paid in the future, which will be linked to average coal price thresholds.
The transaction is expected to be completed by mid-2024.
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.