BHP SAID yesterday it struck a £816m deal to sell its 80 per cent interest in BHP Mitsui Coal (BMC), a metallurgical coal joint venture in Queensland, Australia.

A subsidiary of Stanmore Resources Limited will acquire 100 per cent of the shares in Dampier Coal (Queensland) from BHP Minerals, the subsidiary which holds BHP's interest in BMC, for cash consideration of up to $1.35bn.

The purchase price comprises $1.1bn cash on completion, $100m in cash six months after completion and the potential for up to $150m in a pricelinked earnout payable in the 2024 calendar year.

BHP's President Minerals Australia Edgar Basto said: "This transaction is consistent with BHP's strategy, delivers value for our company and shareholders and provides certainty for BMC's workforce and the local community."

"As the world decarbonises, BHP is sharpening its focus on producing higher quality metallurgical coal sought after by global steelmakers to help increase efficiency and lower emissions," he added.

Stanmore Resources is an Australian Securities Exchange listed business with operations in Queensland's Bowen Basin and has committed to oversee and operate BMC in compliance with industry best practice in relation to safety and environmental performance, as well as regulatory, community and workforce engagement. Golden Energy and Resources Limited, a Singapore Exchange listed company and Stanmore Resources' major shareholder, guarantees Stanmore Resources' obligations to pay the purchase price and any break fee obligations to BHP up to $600m.

(c) 2021 City A.M., source Newspaper