BHP pockets £1bn after offloading coal unit in COP26 push to lower emissions
November 08, 2021 at 02:41 am EST
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BHP said this morning it struck a £816m deal to sell its 80 per cent interest in BHP Mitsui Coal (BMC), an metallurgical coal joint venture in Queensland, Australia.
A subsidiary of Stanmore Resources Limited will acquire 100 per cent of the shares in Dampier Coal (Queensland) from BHP Minerals, the subsidiary which holds BHP’s interest in BMC, for cash consideration of up to $1.35bn.
The purchase price comprises $1.1bn cash on completion, US$100m in cash six months after completion and the potential for up to $150m in a price-linked earnout payable in the 2024 calendar year.
Excluding the price-linked earnout, this represents an Enterprise Value/EBITDA multiple of 6.9x, the company said in a statement.
BHP’s President Minerals Australia Edgar Basto said: “This transaction is consistent with BHP’s strategy, delivers value for our company and shareholders and provides certainty for BMC’s workforce and the local community.”
“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,” he added.
Stanmore Resources is an Australian Securities Exchange listed business with operations in Queensland’s Bowen Basin and has committed to oversee and operate BMC in compliance with industry best practice in relation to safety and environmental performance, as well as regulatory, community and workforce engagement.
Golden Energy and Resources Limited, a Singapore Exchange listed company and Stanmore Resources’ major shareholder, guarantees Stanmore Resources’ obligations to pay the purchase price and any break fee obligations to BHP up to $600m, the companies said.
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Stanmore Resources Limited is an Australia-based resources company with operations and exploration projects in the Bowen and Surat basins. The Company controls and operates the Isaac Plains Complex, South Walker Creek and Poitrel metallurgical coal mines, as well as the undeveloped Wards Well, Isaac Plains underground and Isaac Plains South projects, in Queensland's Bowen Basin region. The Isaac Plains Complex comprises the Isaac Plains Mine and processing facilities, the adjoining Isaac Plains East and Isaac Downs mining areas, and the Isaac Plains Underground development project. South Walker Creek is an open cut mine located approximately 35 kilometers (km) west of Nebo in Queensland's Bowen Basin. The Company has a 50% interest in MetRes Pty Limited, a joint venture between Stanmore Resources Limited and M Resources, to own and operate the Millennium and Mavis Downs Mine. Its projects also include Lilyvale, Mackenzie, The Range, Belview and Clifford, among others.