Yancoal to acquire interest in Kestrel Coal Mine

Highlights:

• Yancoal has entered into a binding sale and purchase agreement (SPA) to acquire a 100% interest in Kestrel Coal Group Pty Ltd (KCG, together with its subsidiaries), which holds an 80% interest in the Kestrel Joint Venture, from the vendors for up to US$2.4 billion in consideration, comprising:
  • Upfront cash consideration of US$1.85 billion, payable on completion.
  • Contingent cash consideration up to a maximum of US$550 million in total, payable annually over a five year period from completion, if in any year the average (mean) published daily prices for the Platts Premium Low Vol. Hard Coking Coal FOB Australia (PLVHA00) Index exceeds a specified threshold.
• Yancoal intends to fund the acquisition via a combination of available cash, a US$1.2 billion five-year syndicated acquisition loan facility and, in respect of the contingent consideration, cash flows generated by the enlarged Yancoal business over the first five years after completion of the acquisition.
• A US$200 million, five year committed working capital facility is also in place to support Yancoal’s liquidity requirements over this period.
• The acquisition is a strong strategic fit for Yancoal’s portfolio, which will positively contribute to our production and operating cash flow. The acquisition also diversifies Yancoal’s portfolio, increasing the share of metallurgical coal production on a pro forma basis to 22%.
• Kestrel produces a premium metallurgical product (high fluidity and plasticity, low ash, and low deleterious elements), which is in high demand from steelmakers.
• The acquisition strengthens Yancoal’s position in Queensland’s Bowen Basin, with Kestrel located near Yancoal’s existing Middlemount joint venture and Yarrabee operation.
• Kestrel is the largest producing underground coal mine in Australia. In 2025 it recorded saleable production of 5.9 million t (100% Kestrel basis). It has a 25 year mine life underpinned by 164 million t Marketable Coal Reserves. In addition to this, it has a substantial Coal Resource of 406 million t (100% Kestrel basis).
• Kestrel is a highly productive mine and benchmarks as a top-two Australian underground mine on key productivity measures.
• Completion of the acquisition is subject to satisfaction of conditions precedent including regulatory approvals. Completion is targeted towards the end of 3Q26.
• Yancoal’s Directors believe that the terms of the SPA are fair and reasonable, and in the interests of the shareholders of the company as a whole.

Sharif Burra, CEO of Yancoal, comments:

“The proposed acquisition of 80% of the Kestrel Coal Mine represents a strong strategic fit for Yancoal and adds another high-quality, long-life mine to our portfolio. Kestrel delivers increased scale and diversification to Yancoal’s portfolio and is expected to contribute premium metallurgical coal into our product mix. The acquisition positions us to deliver greater value to our shareholders and consolidates Yancoal’s position as a leading Australian coal miner. We look forward to working closely with Mitsui, the joint venture partner and owner of 20% of Kestrel, in the future as co-owners of Kestrel to continue to add value to the mine, local communities, and stakeholders.”

Read the article online at: https://www.worldcoal.com/coal/21042026/yancoal-to-acquire-interest-in-kestrel-coal-mine/