BHP sells its Australian coking coal mines to Stanmore Resources in a $1.2 billion deal

Global miner BHP will be selling two of its Australian coking coal mines to Stanmore Resources for $1.2 billion. Australia’s largest mining company BHP Group signed a deal to sell its stake in BHP Mitsui Coal (BMC), a metallurgical coal joint venture in Queensland to Stanmore Resources Ltd, for up to $1.35 billion.

Under the deal, Stanmore has agreed to pay $1.2 billion to acquire BHP’s 80 percent stake in the BHP-Mitsui Coal joint venture’s South Walker Creek and Poitrel mines in the Bowen Basin. The deal marks the latest effort in its push to align its portfolio with global decarbonization efforts better.

The two mines produce 10 million tonnes a year of coking coal, which, combined with iron ore in steelmaking furnaces, creates molten pig iron. BHP said it would continue to operate the assets until the deal’s completion and provide ‘transitional services’ to Stanmore for a short time.

If a deal is completed, BHP’s only remaining coking coal mines would be its higher-quality hard coking coal mines jointly owned with Mitsubishi. BHP believes it will be increasingly needed to meet the world’s ongoing steel demand, including constructing clean-energy infrastructure such as wind turbines.

Stanmore will pay $1.1 billion on completion of the sale and an additional $100 million after six months. The companies added that the deal could rise to $150 million in a price-linked earnout, payable in 2024.