BHP and Mitsubishi Development (MDP) have signed an Asset Sale Agreement for the sale of their jointly owned Blackwater and Daunia mines in Queensland, for cash consideration of up to US$4.1 billion.
The mines are part of the BHP Mitsubishi Alliance (BMA) metallurgical coal joint venture in Queensland, of which BHP and MDP each hold 50 per cent interest.
Two wholly owned subsidiaries of Whitehaven Coal have agreed to acquire the Blackwater mine and Daunia mine respectively, with Whitehaven guaranteeing the obligations of each buyer.
The purchase price comprises US$2.1 billion cash on completion, US$1.1 billion in cash over three years after completion and the potential for up to US$0.9 billion in a price-linked earnout payable over three years.
The sale is subject to the satisfaction of certain conditions, including competition and regulatory approvals. The buyers have agreed to pay a US$100 million deposit on signing which BHP and MDP are entitled to retain if the proposed divestment is terminated in certain limited circumstances.
Completion is expected to occur in the June 2024 quarter. The buyers will assume economic and operating control of the Daunia and Blackwater mines on completion of the sale, including all current and future environmental liabilities and rehabilitation obligations.
BMA will continue to operate the assets until completion and work closely with the buyers and Whitehaven Coal to ensure a successful transition of ownership. BHP will support certain transitional services to the Buyers for a short period of time after completion.
BHP’s President Minerals Australia, Geraldine Slattery, said that this transaction has delivered a good outcome for the BMA, its workforce and the communities around the Blackwater and Daunia operations.
“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,” Ms Slattery said.
“In line with our long-term strategy, we will continue to develop our high-quality metallurgical coal assets in Queensland, which are sought after by global steelmakers and needed to support the energy transition.”
