Australian miner BHP Group Ltd. will let go of its controlling stake in two metallurgical coal mines to Stanmore Resources Ltd. for as much as $1.35 billion.
- BHP said it will sell its 80% stake in BHP Mitsui Coal (BMC), which operates the South Walker Creek and Poitrel coal mines in Queensland. It will receive $1.12 billion in cash upon completion of the deal and another $100 million six months later.
- BHP said the proceeds from the sale of the coal mines located in the coal-rich Australian state of Queensland will be used for future dividends, buybacks, or both. The deal is expected to be finalized in mid-2022.
- The world’s biggest miner based on market value could receive up to $150 million more by 2024, depending on movements in the price of metallurgical coal, which is a key material for steel manufacturing.
- Talks of a possible sale came amid the surging coal prices, with the prices of Australian hard coking coal exports up to record-highs in September, before reaching a plateau.
Stanmore said BMC operations were located close to some of its assets and could benefit from sharing infrastructure and blending coal.
BHP is up 0.04% premarket, while SMR.AX closed up 14.01%.