Whitehaven Coal to Acquire Blackwater and Daunia Coal Mines in $3.2 Billion Deal
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Whitehaven Coal said it has executed definitive sale agreements with BHP Group and Mitsubishi Development to acquire 100 percent of both the Daunia and Blackwater metallurgical coal mines for an aggregate cash consideration of $3.2 billion.
Whitehaven said it has agreed to an upfront consideration of $2.1 billion and deferred payments of $500 million. Whitehaven added it has also agreed to price-linked contingent payments of up to $900 million over three years dependent on average annual realized pricing exceeding agreed thresholds.
The company said the acquisition is expected to complete in the June 2024 quarter subject to satisfying conditions precedent including regulatory and merger control approvals, adding that the acquisition does not require shareholder approval.
According to Whitehaven, the Daunia Coal Mine is an open-cut coal mine located 30 km south-east of Moranbah, and about 170 km southwest of Mackay in Queensland. The mine produces a hard coking coal (HCC) and pulverized coal injection (PCI) metallurgical coal products, and it is expected to produce an average of ~4.9 Mtpa of saleable coal production over the next five years.
The Blackwater Coal Mine is an open-cut mine which lies 73km south-east of Emerald in Queensland and is expected to produce an average of ~12.4 Mtpa of saleable coal production over the next five years. It is one of the largest coal mines in Australia. Both HCC and semi soft coking coal (SSCC) metallurgical coal products are mined at Blackwater.
“This transformational acquisition will pivot our portfolio towards metallurgical coal, which has been a core pillar of our strategy for many years making this a better balanced business. Our thermal coal business remains strategically important as we continue to provide much-needed coal products to support the global energy transition and as customers seek our high-quality and high-CV products to limit their emissions,” said Whitehaven CEO and Managing Director Paul Flynn.
“This is a highly attractive and materially earnings accretive acquisition, with considerable upside potential, which we expect will deliver meaningful returns to our shareholders for many years to come. It strengthens our portfolio of quality, long life assets in attractive locations providing geographic and operational diversification and scale benefits,” added Flynn.
Whitehaven is Australia’s leading producer of high-quality, high-CV thermal coal. The company said that its thermal and metallurgical coal products are exported to premium markets in Asia. The company’s operations are located in the Gunnedah Basin in New South Wales with growth projects in both the Gunnedah Basin and Bowen Basin in Queensland.
Whitehaven Coal develops and operates coal mines in New South Wales and Queensland. It operates through three segments: open cut operations, underground operations, and coal trading and blending. The company produces metallurgical and thermal coal. It operates four mines, including three open cut and one underground located in the Gunnedah Coal Basin in New South Wales. The company sells coal in Japan, Korea, Taiwan, Malaysia, New Caledonia, Vietnam, Indonesia, Europe, and internationally. Whitehaven Coal Limited was founded in 1999 and is based in Sydney, Australia.
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