8th Nov 2021 05:46
(Alliance News) - BHP Group Ltd on Monday announced the sale of its 80% interest in the metallurgical coal joint venture BHP Mitsui Coal, to Stanmore SMC Holdings Pty Ltd for up to USD1.35 billion in cash.
BHP Mitsui Coal is situated in Queensland, Australia, and comprises the Poitrel and South Walker Creek operations, Red Mountain Infrastructure and the Wards Well development. Stanmore SMC is a subsidiary of Brisbane, Australia-based coal miner Stanmore Resources Ltd.
The USD1.35 billion payment consideration is made up of an initial payment of USD1.1 billion, USD100 million in cash six months after the completed sale and up to USD150 million in a price-linked earnout, which will be payable in 2024.
The sale is conditional on gaining regulatory approval, including from the Australia Foreign Investment Review Board. The transaction is expected to be completed in the middle of 2022, after which Stanmore will assume economic and operating control of BHP Mitsui Coal.
Proceeds from the sale will go towards BHP's capital allocation framework, which will determine the manner to "maximise value to shareholders" through either dividends, share buybacks or both.
"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. 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," said Edgar Basto, president for Minerals Australia.
Shares in BHP closed 0.8% higher at AUD36.38 on Monday in Sydney.
By Dayo Laniyan; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
BHP Group