One of the world’s largest mining companies, BHP (ASX, LON, NYSE: BHP), is to divest up to US$1.35B of its Australian metallurgical coal assets, it was revealed yesterday. BHP is selling its 80% interest in BHP Mitsui Coal (BMC), a 80:20 joint venture with Japan’s Mitsui and with operations in Queensland, to junior miner Stanmore Resources Ltd (ASX: SMR).
Stanmore Resources has agreed to acquire 100% of BHP’s shares in BMC for up to US$1.35B. The deal includes US$1.1B cash on completion and US$100M in cash six months after completion, plus the potential for up to US$150M in a price-linked earnout which would be payable in 2024.
Edgar Basto, BHP’s President Minerals Australia, said that the deal is consistent with BHP’s strategy and that it delivers value for shareholders. He also said that it delivers certainty for BMC’s workforce as well as for the local community.
“As the world decarbonizes, BHP is sharpening its focus on producing higher quality metallurgical coal sought after by global steelmakers to help increase efficiency and lower emissions.
“Under this agreement, BMC will transition to Stanmore Resources, an ASX-listed company that has established relationships with Traditional Owners and strong engagement with their workforce and local communities.
“Stanmore Resources share our focus on safety performance and culture and support Australia’s commitments under the Paris Agreement,” said Mr Basto.