BHP sells stake in metallurgical coal JV to Stanmore for US $1.35 bln

Global mining firm BHP announced it will divest its 80 percent interest in BHP Mitsui Coal (BMC), an operated metallurgical coal joint venture in Queensland, the companies said in a statement on Monday.

“Stanmore SMC Holdings Pty Ltd, a wholly owned subsidiary of Stanmore Resources Limited (Stanmore Resources), has agreed to acquire 100 per cent of the shares in Dampier Coal (Queensland) Pty Ltd from BHP Minerals Pty Ltd, the subsidiary which holds BHP’s interest in BMC, for cash consideration of up to US$1.35 billion,” said the statement. 

According to the companies, the purchase price comprises US$1.1 billion cash on completion, US$100 million in cash six months after completion and the potential for up to US$150 million in a price-linked earn out payable in the 2024 calendar year. This will  exclude the price-linked earnout, which represents an Enterprise Value/EBITDA multiple of 6.9x1.

“Under this agreement, BMC will transition to Stanmore Resources, an ASX-listed company that has established relationships with Traditional Owners and strong engagement with their workforce and local communities,” said BHP’s President Minerals Australia Edgar Bast in the statement,

The sale is still subject to regulatory procedures. The companies said that if passed, Stanmore Resources would assume economic and operating control of BMC.The completion is expected to occur in the middle of the 2022 calendar year.