BHP announced 8 November it has inked a deal to divest its 80% holding in BHP Mitsui Coal (BMC), effectively exiting the metallurgical coal scene in Queensland, Australia.
The deal with Stanmore SMC Holdings, a subsidiary of Stanmore Resources, is worth US$1.35 billion: $1.1 billion upon completion of the deal and $100 million in cash six months after completion and the potential for up to US$150 million in a price-linked earnout payable in calendar year 2024.
Should the transaction complete, Stanmore will assume economic and operating control of BMC. BHP will continue to operate BMC until the transaction completes and will provide transitional services for a short period after the deal is sealed.
“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,” BHP’s President Minerals Australia Edgar Basto said.
“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. Stanmore Resources share our focus on safety performance and culture and support Australia’s commitments under the Paris Agreement.”
Completion is expected in mid-2022.