One of Peabody Energy’s Australian subsidiaries has entered into a definitive agreement to sell Metropolitan mine in New South Wales, Australia, and its associated 16.67% interest in the Port Kembla Coal Terminal to a subsidiary of South32 for US$200 million in cash, subject to customary working capital adjustments.
The transaction also includes a contingent value right that enables Peabody to realise additional cash proceeds should future metallurgical coal prices remain in excess of an agreed forward curve for a period of approximately 12 months following completion. The sale also is expected to release Peabody of approximately AUS$20 million in financial assurances, in the form of bank guarantees and cash, which will be replaced by South32 upon completion.
"This sale supports our actions to strengthen the Australian portfolio, which remains core to Peabody, and is consistent with the strategy outlined in our business plan," said President and CEO Glenn Kellow. "We expect the transaction to be accretive to the value reflected in the business plan, generate meaningful proceeds for the Australian business, decrease future capital expenditure needs, and reduce risk to the Australian platform as we pursue a smaller but more profitable portfolio going forward."
South32 CEO Graham Kerr said: "The Metropolitan Colliery is a natural fit within our portfolio and the acquisition is consistent with our strategy to invest in high-quality mining operations where we can create value. The mine's recently upgraded infrastructure and close proximity to Illawarra metallurgical coal will enable us to further optimise performance and unlock unique blending and resource synergies. We look forward to the Metropolitan team joining South32."
The transaction is not expected to have any impacts on the mine staff, workforce or community, as South32 shares similar core values as Peabody from a safety, operations and sustainability perspective.
Read the article online at: https://www.worldcoal.com/coal/04112016/peabody-sells-metropolitan-mine-to-south32-for-us200-million/