BHP has officially sold its Daunia and Blackwater metallurgical coal mines to Whitehaven Coal for up to $US4.1 billion ($6.4 billion).
Whitehaven first confirmed that it was in the running to acquire the Queensland mines back in September.
Now it will purchase the mines for an aggregate cash consideration of $US3.2 billion ($5 billion).
The purchase price comprises of:
- $US2.1 billion ($3.3 billion) in cash that’s payable on completion
- $US1.1 billion ($1.7 billion) in cash to be paid in separate tranches on the first, second and third anniversary of the completion date
- potentially $US900 million ($1.4 billion) in a price-linked earn-out that will be payable over three years.
“This transaction has delivered a good outcome for the BHP Mitsubishi Alliance, our workforce and the communities around the Blackwater and Daunia operations,” BHP president of minerals Australia Geraldine Slattery said.
“Whitehaven Coal has a strong track record as a responsible and reliable operator, and we will work closely with them to achieve a smooth change of ownership focused on maintaining safe and productive operations and supporting people and communities through the transition.”
BHP’s sale to Whitehaven is subject to certain conditions, including competition and regulatory approvals being satisfied. It is expected to be completed in the June 2024 quarter.
Once complete, Whitehaven will assume economic and operating control of both mines, including all their current and future environmental liabilities and rehabilitation obligations.
“This transformational acquisition will pivot our portfolio towards metallurgical coal, which has been a core pillar of our strategy for many years making this a better-balanced business,” Whitehaven chief executive officer and managing director Paul Flynn said.
“This is a highly attractive and materially earnings accretive acquisition, with considerable upside potential … It strengthens our portfolio of quality, long life assets in attractive locations providing geographic and operational diversification and scale benefits.
“Daunia and Blackwater produce much-needed metallurgical coal that is in high demand across Asia – including in India and southeast Asia where population growth and economic development is expected to drive strong demand for steel production and metallurgical coal through to at least 2050.”
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