All conditions have been satisfied in South32’s sale of Illawarra Metallurgical Coal, meaning M Resources and Golden Energy and Resources will soon become the official owners of the operation.
With the sale, South32 said it aims to streamline its operations, bolster its balance sheet, and reduce capital intensity, thereby freeing up capital for reinvestment into priority areas and portfolio optimisation.
South32 chief executive officer Graham Kerr thanked the Illawarra Metallurgical Coal team for their contributions and wished them continued success in the future.
“The sale of Illawarra Metallurgical Coal is a significant milestone in the transformation of our portfolio towards commodities critical to a low carbon future,” Kerr said.
“The transaction will simplify our business, strengthen our balance sheet and reduce our capital intensity, unlocking capital to invest in our high-quality development projects in copper and zinc.
“We remain focused on delivering our development projects and advancing our portfolio of earlier stage options to further increase our exposure to commodities critical to a low carbon future and realise substantial value for our shareholders.”
South32 will receive $US1.05 billion ($1.6 billion) as part of the transaction, adjusted for a previously paid deposit of $US40 million.
Additionally, South32 will receive deferred cash payments totalling $US250 million in 2030 and contingent price-linked cash considerations of up to $US350 million, which will be recognised in their financial statements as non-current receivables and financial assets, respectively.
The deal is expected to be completed on September 2, with the buyer assuming economic and operating control of Illawarra Metallurgical Coal.
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