© Reuters.
BHP Group (NYSE:) Limited and its joint venture partner Mitsubishi Development Pty Ltd, operating under the BHP Mitsubishi Alliance (BMA), are set to sell their Blackwater and Daunia metallurgical coal mines to Whitehaven Coal Ltd. The deal, announced on Wednesday, is valued at a maximum of $4.1 billion.
The sale is part of Mitsubishi Corporation’s strategic shift towards high-quality metallurgical coal assets. The payment structure involves $2.1 billion cash on completion and a potential price-linked earnout of $0.9 billion over three years. Additionally, the agreement includes a $100 million deposit that is retainable under specific termination scenarios.
Whitehaven Coal, a well-known operator listed on the Australian Stock Exchange, will guarantee the obligations of the deal. BMA will continue to operate the mines until completion in June 2024, ensuring a successful transition of ownership. Post-sale, BHP will provide transitional services, and the proceeds from the sale will be used to reduce BHP’s net debt.
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