Lending Association

BHP completes sale to Whitehaven Coal

BHP (ASX:BHP) and its partner, Mitsubishi Development, have completed the sale of their unwanted central Queensland coal mines at Daunia and Blackwater to Whitehaven Coal (ASX:WHC).

BHP and Mitsubishi are 50-50 per cent partners in BMA, owners of the world’s richest coking coal reserves and export operations.

In a statement to the ASX Tuesday afternoon, BHP said Whitehaven Coal had paid BMA US$2 billion cash consideration (around A$3 billion) on completion plus a preliminary completion adjustment of US$44.1 million for working capital and other agreed adjustments (100 per cent interest basis).

Whitehaven paid a US$100 million deposit on signing of the Asset Sale Agreement on 18 October 2023.

BHP said US$1.1 billion cash remains payable by Whitehaven Coal to BMA over 3 years after completion and a potential additional amount of up to US$900 million in a price-linked earnout may also be payable by Whitehaven Coal to BMA over 3 years (100 per cent interest basis).

The price-linked earnout is subject to a cap of US$350 million each year and depends on average realised pricing exceeding agreed thresholds for each of the three years following completion on 2 April 2024.

The total cash consideration for the transaction will be up to US$4.1 billion plus the final completion adjustment amount.