Mining giant BHP (ASX:BHP) has signed an agreement to divest its 80 per cent interest in BHP Mitsui Coal (BMC), an operated metallurgical coal joint venture in Queensland.
Stanmore Resources has agreed to purchase 100 per cent of shares in Dampier Coal from BHP Minerals, the subsidiary which holds BHP’s interest in BMC for up to US$1.35 billion ($1.8 billion).
BHP said the purchase price comprises US$1.1 billion cash on completion, US$100 million in cash six months after completion and the potential for up to US$150 million in a price-linked earnout payable in the 2024 calendar year.
The sale is subject to certain conditions, including customary competition and regulatory approvals. Completion is expected to occur in the middle of the 2022 calendar year, while BHP will continue to operate BMC until completion.
“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,” said BHP’s president of Minerals Australia, Edgar Basto.
“Under this agreement, BMC will transition to Stanmore Resources, an ASX-listed company that has established relationships with Traditional Owners and strong engagement with their workforce and local communities.”
Shares in BHP (ASX:BHP) are trading 1.5 per cent higher at $36.64.