South32 buys NSW coal mine, port stake, from Peabody
South32 will pay Peabody $US200m for Metropolitan colliery and a 17pc stake in Port Kembla coal terminal.
South32 will buy a metallurgical coal mine in NSW’s southern coalfields, together with a stake in a coal port, from Peabody Energy for $US200 million.
South32 (S32), the coal and metals miner spun out of BHP Billiton last year, said it has signed an agreement to buy Peabody’s Metropolitan Colliery and an associated 17 per cent interest in the Port Kembla Coal Terminal, south of Sydney.
It will pay Peabody $US200 million in cash. The companies will also set up a mechanism to share the benefits of further possible strength in coal prices in the year ahead, whereby extra cashflow is split on sales above agreed prices.
The price of metallurgical coal, used in steelmaking, has tripled this year mainly because of restrictions on China’s own production.
The underground mine, which has a capacity to produce 2.3 million tonnes of coal a year, is 10km east of South32’s Appin Colliery mine.
“The Metropolitan Colliery is a natural fit within our portfolio,” said South32 Chief Executive Graham Kerr.
South32 also already manages the Port Kembla Coal Terminal on behalf of a consortium of miners that includes Glencore.
The deal is expected to be completed in the first quarter of 2017, it said.
Dow Jones Newswires