Bowen Coking Coal acquires New Hope’s share in Burton, Lenton projects

The deal worth $77.5 million will revive a stalled mine and another undeveloped mine in the Bowen Basin.

Bowen Coking Coal has bought out the controlling stake in the Burton Coal Mine and Lenton project in a $20 million deal.

The latest acquisition is expanding Bowen Coking Coal’s portfolio as a multi-mine operator, buying out New Hope Corporation’s 90 per cent interest in the Lenton Joint venture.

The LJV owns both the Burton Coal Mine and new Lenton Project in the northern Bowen Basin district, with BCC offering an upfront $10 million cash and $10 million cash or stock followed by potential milestone and royalty payments to the maximum value of $77.5 million.

Lenton, a subsidiary of Formosa Plastics, holds the remaining 10 per cent.

The deal could unlock the undeveloped Lenton project with its total coal resources of 140 million tonnes.

The neighbouring Burton open cut mine, in care and maintenance mode, has three unmined open pit deposits with total coal resources of 64Mt.

Production is expected to begin within the next 12 to 18 months.

The site includes substantial infrastructure holdings including $300 million 5.5Mtpa Burton Coal Handling and Preparation Plant.

Bowen executive chairman Nick Jorss said the acquisition was “transformational” for the company.

Bowen executive chairman Nick Jorss. Photo: Emily Smith

“The acquisition of the Burton Mine delivers on our strategy to create the next significant coking coal producer in the Bowen Basin which is further underlined by securing preferred bidder status at the Bluff PSI mine last week,” he said.

“The Burton acquisition creates an exciting opportunity to materially enhance the scale and diversity of Bowen’s coking coal assets, capitalise on the significant infrastructure acquired, and set up a processing hub to service the company’s adjacent assets.”

Bowen Coking Coal owns 100 per cent stakes in Broadmeadow East, Isaac River, Cooroorah, and Comet Ridge, and 90 per cent of Hillalong coking coal projects.

Nick Jorss when the company acquired a Moranbah mine for $1. Pic Annette Dew

It is a joint venture partner with Stanmore in the Lilyvale (15 per cent) and Mackenzie (5 per cent) projects.

The immediate focus would be on reopening the 350-bed accommodation village and train load out facility at the Burton Mine which operated for more than 18 years until 2016.

“We plan to be in production within 12 to 18 months at Burton and this will dovetail in with the development of our nearby Broadmeadow East Project which we are seeking to fast-track to production within six months using third party processing infrastructure,” Mr Jorss said.

“The Burton mine has a proven track record for producing a coal brand that was valued by the steel industry worldwide for its high quality, low ash and low sulphur.

“We will be working fast to secure exposure to strong and sustained coking coal prices.

“Australian export hard coking coal indices have increased around 90 per cent since March and long-term demand is forecast to increase substantially driven by growth in global steel production.”

Originally published as Bowen Coking Coal acquires New Hope’s share in Burton, Lenton projects