Located in Queensland’s Bowen Basin, the producing Blackwater and Daunia open-cut coal mines are part of the BHP Mitsubishi Alliance metallurgical coal joint venture, in which BHP and Mitsubishi Development own a 50% interest each
Whitehaven to acquire the Blackwater and Daunia coal mines from BHP and MDP in a deal worth up to $4.1bn. (Credit: BHP)
BHP and Mitsubishi Development (MDP) have agreed to sell the Blackwater and Daunia metallurgical coal mines in Australia to Whitehaven Coal in a deal worth up to $4.1bn.
The consideration for the acquisition includes $2.1bn cash on the completion, $1.1bn in cash over three years after completion, and the opportunity for a price-linked earnout of up to $900m payable over the same three-year period.
Located in Queensland, the Blackwater and Daunia mines are part of the BHP Mitsubishi Alliance (BMA) metallurgical coal joint venture (JV), in which BHP and MDP own a 50% interest each. Both the assets are open-cut mines.
The Daunia coal mine produces hard coking coal and pulverised coal injection metallurgical coal products. It is expected to generate an average of about 4.9 million tonnes per annum (Mtpa) of saleable coal production over the next five years.
Claimed to be one of the largest coal mines in Australia, the Blackwater coal mine is estimated to produce an average of approximately 12.4Mtpa of saleable coal production over the next five years.
BHP minerals Australia president Geraldine Slattery said: “This transaction has delivered a good outcome for the BHP Mitsubishi Alliance, our workforce and the communities around the Blackwater and Daunia operations.”
According to Whitehaven Coal, the acquisition will deliver substantial value upside with promising growth opportunities in Queensland’s Bowen Basin.
Besides, the transaction is expected to transform Whitehaven Coal into a metallurgical coal producer in line with its strategy.
Whitehaven Coal CEO and managing director Paul Flynn said: “This transformational acquisition will pivot our portfolio towards metallurgical coal, which has been a core pillar of our strategy for many years making this a better balanced business.
“Our thermal coal business remains strategically important as we continue to provide much-needed coal products to support the global energy transition and as customers seek our high-quality and high-CV products to limit their emissions.”
Subject to certain conditions, including competition and regulatory approvals, the transaction is anticipated to be completed in the June 2024 quarter.
In May 2023, BHP completed the A$9.6bn acquisition of rival Australian mining company OZ Minerals through a scheme implementation deed (SID).