BHP has reached an agreement to sell its 80% interest in BHP Mitsui Coal (BMC), an operated metallurgical coal joint venture in Queensland, to Stanmore Resources.
The US$1.35 billion transaction, subject to customary competition and regulatory approvals, will see Stanmore create a leading global metallurgical coal producer with a portfolio of high quality assets in the Bowen Basin, a leading global metallurgical coal basin.
BMC owns high quality metallurgical coal assets with Mineral Resources of 2,245 million tonnes and Total Coal Reserves of 171 million tonnes based on open cut operations.
The company owns the world class South Walker Creek and Poitrel mines, with combined metallurgical coal production of around 10Mt per annum and total marketable reserves in excess of 135Mt, as well as the undeveloped Wards Well coal project.
BHP’s President Minerals Australia Edgar Basto said the transaction was consistent with BHP’s strategy.
“As the world decarbonises, BHP is sharpening its focus on producing higher quality metallurgical coal sought after by global steelmakers to help increase efficiency and lower emissions,” Mr Basto continued.
“South Walker Creek and Poitrel are well-run assets that have been an important part of our portfolio for many years and we are grateful for their contribution to BHP.
“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.”
Mr Marcelo Matos, CEO of Stanmore, noted that BMC’s assets are in close proximity to Stanmore’s and its MetRes JV’s existing operating assets, allowing the combined group to benefit from shared infrastructure, corporate functions and coal blending opportunities.
“This transaction will see the Company become one of the leading metallurgical coal producers globally and provide Stanmore with a portfolio of tier 1 assets, with a significantly increased reserves and resources base and assets with an expected mine life exceeding 25 years production, positioning the company for substantial cashflow generation and future growth opportunities,” he continued.
“BHP have managed the BMC business competently and responsibly over the years, and as new custodians we look forward to integrating the BMC business into Stanmore with a continued focus on safety, and responsibly and sustainably producing high quality metallurgical coal products for our global customers.”