Mining company South32 has secured approval from the Australian Foreign Investment Review Board (FIRB) or the divestment of its Illawarra metallurgical coal assets to an entity owned by Golden Energy and Resources (GEAR) and coal trader M Resources.
The transaction, first announced in February, is a significant move for the company aimed at streamlining its portfolio and focusing growth on other sectors.
The deal, valued at $1.65bn, includes an upfront cash payment of $1.05bn and an additional $250m deferred until 2030.
Furthermore, a contingent payment of up to $350m is linked to future coal prices.
The transaction is expected to close in the first quarter of the 2025 financial year.
Illawarra Metallurgical Coal, located in New South Wales, Australia, produces premium, hard coking coal used in steelmaking.
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The coal is transported both within Australia and internationally.
The Illawarra Metallurgical Coal operations are situated in the Illawarra and Macarthur regions of the southern coalfields of New South Wales, approximately 75km south of Sydney.
Over the years, South32 has modernised the coal mining process at Illawarra Metallurgical Coal, enhancing safety and efficiency.
The company also has underground mines at Appin and Dendrobium that contribute hard coking coal for steelmaking, along with small amounts of energy coal as a byproduct.
In May this year, South32 entered an earn-in agreement with Hammer Metals, giving it the opportunity to acquire an 80% interest in the Isa Valley Project, which is part of Hammer’s Mount Isa Project in north-west Queensland.
The agreement specifies that a joint venture will be formed upon the completion of certain exploration milestones.
The Isa Valley Project, identified as EPM28189, covers 321km² and is located 60km south of Mount Isa. It is part of Hammer’s larger 2,800km² holdings in the region.
