China-linked firm takes majority stake in Qld coal mine
A China-linked group is buying a majority stake in Australia’s largest underground coal mine in a deal valued at US$2.4 billion ($3.4 billion) to boost its portfolio.
Listed Yancoal Australia, majority owned by China’s Yankuang Energy Group, will pay US$1.85 billion ($2.6 billion) upfront for an 80 per cent stake in the Kestrel coking coal mine north-east of Emerald in central Queensland.
Yancoal will also receive revenue of US$550 million ($771 million) from conditional payments over the next five years, depending on whether coking coal prices rise by around US$225 per tonne.
Yancoal is buying the shares from Hong Kong-based private equity manager EMR Capital and Indonesian coal company Adaro Group, which bought it from Rio Tinto for US$2.25 billion ($2.9 billion) in 2018.
Japan’s Mitsui retains a 20 percent stake in the operation.
Yancoal CEO Sharif Burra said the acquisition was a “strong strategic fit” for Yancoal, which has two other coal mines in the region, the Middlemount joint venture and the Yarrabee mine.
“Kestrel brings greater scale and diversity to Yancoal’s portfolio and is expected to contribute premium metallurgical coal to our product range,” he said.
Matt Warder, a coal analyst who runs the Coal Trader website. sent I stated that Kestrel was a “great fit” for Yancoal and frankly I had been hoping for this purchase for a long time.
Kestrel is expected to produce 5.9 million tonnes of coal in 2025 and is expected to remain in production for another 25 years.
Mining at Kestrel began in 1992, when it was known as the Gordonstone mine.
Yancoal shares fell 3.7 percent to $6.96 in midday trading on Wednesday.
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