BHP has signed an Asset Sale Agreement with Mitsubishi Development Pty Ltd (MDP) to divest the Blackwater and Daunia mines, which are part of the BHP Mitsubishi Alliance (BMA) metallurgical coal joint venture.
Whitehaven Coal‘s two wholly owned subsidiaries have agreed to buy the Blackwater and Daunia mines for a total cash consideration of up to US$4.1 billion. Whitehaven Coal has guaranteed each Buyer’s commitments.
The purchase price includes US$2.1 billion cash on completion, US$1.1 billion over 3 years after completion, and a potential US$0.9 billion price-linked earnout, representing an Enterprise Value/Reserves multiple of 12.8/t.
The sale is subject to conditions, including competition and regulatory approvals. The Buyers have agreed to pay a US$100 million deposit, which BHP and MDP can retain if divestment is terminated.
The sale of the Blackwater and Daunia mines is set to be completed in June 2024, with the Buyers taking control of the mines and all associated environmental liabilities and rehabilitation obligations.
BMA will operate the assets until completion, working closely with Buyers and Whitehaven Coal for a successful ownership transition. Meanwhile, BHP will provide temporary transitional services to buyers after the completion.
“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 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,” Slattery added.
BHP noted that net proceeds will be used to reduce its net debt.
