Yancoal acquires 80% Kestrel coal mine stake in USD2.4b deal
Make us a preferred source
Make us a preferred source on Google
The news: Yancoal Australia has announced plans to acquire an 80% stake in the Kestrel coking coal mine in Queensland’s Bowen Basin.
The numbers: In an ASX announcement published after market close on Tuesday, Yancoal said it has entered into a binding sale and purchase agreement to acquire a 100% interest in Kestrel Coal Group, which holds an 80% interest in the Kestrel Joint Venture, for up to USD2.4 billion ($3.37 billion).
The remaining 20% will be held by Japan’s Mitsui & Co, controlled by China’s state-owned Yankuang Energy.
Under the terms of the deal, Yancoal will pay cash consideration of USD1.85 billion upon completion as will as a contingent cash consideration of USD550 million, payable annually over a five year period from completion.
Under the contingent considerations, Yancoal will pay the vendors 30% of Yancoal’s share of coal sales revenue from Kestrel if the price of coking coal hits USD225 per tonne.
The context: The deal will strengthen Yancoal’s position as one of Australia’s largest coal miners, and marks a key success in a longstanding pursuit of M&A opportunities, which saw it lose out to Whitehaven Coal on the $6.4 billion sale of the Blackwater and Daunia mines in 2023. It was also excluded from the shortlist to buy Anglo American’s Queensland coal mines over concerns its bid would not be approved by the Foreign Investment Review Board (FIRB).
The Kestrel mine acquisition remains subject to FIRB and ACCC approvals.
What they said: Sharif Burra, CEO of Yancoal said: “Kestrel delivers increased scale and diversification to Yancoal’s portfolio and is expected to contribute premium metallurgical coal into our product mix.”
