Coronado Global Resources agrees new supply deal with Stanwell Corporation

The news: Coal producer Coronado Global Resources is set to agree a deal with Queensland government-owned energy company Stanwell Corporation to "improve Coronado's short- and long-term financial viability".

The numbers: The agreement, which is currently non-binding and subject to due diligence and numerous approvals, will extend the two companies' existing new coal supply agreement (NCSA) from its current end date of 2037 to 2043. It will see Stanwell secure a "wider, more flexible" supply range of 1.2 to 2.24 million tonnes per year.

Coronado's current asset-based loan in place with Oaktree Capital affiliate Highland Park XII will be replaced by Stanwell, which will make available a USD265 million ($404 million), five-year facility, with an interest rate between 9% and 12%.

Coronado said in months when the miner's cash balance is below USD250 million, Stanwell will make prepayments for future NCSA coal, at a competitive fixed interest rate. In months when Coronado's cash balance is above USD300 million, it will deliver nominated NCSA tonnes that have been prepaid for by Stanwell at no cost and reduce the prepayment balance.