Australia’s New Hope has signed an agreement to acquire 10% stake in the Bengalla thermal coal mine in Hunter Valley, New South Wales from Mitsui for A$215m ($155.7m).
Following the completion of the transaction, New Hope will hold a stake of 80% in the Bengalla joint venture.
New Hope intends to finance the transaction by a combination of cash and debt.
New Hope’s Managing Director, Shane Stephan said “acquiring a controlling interest in Bengalla demonstrates New Hope’s long term positive outlook for the global export thermal coal market and our commitment to the Bengalla mine and its employees.
“We are very excited about the company’s immediate prospects and remain committed to delivering our medium term growth objectives.”
The company has also reached a binding commitment with Taipower in respect of the Bengalla joint venture.
Under the commitment, Taipower will buy a further 10% stake in the Bengalla by taking part in the sale by Wesfarmers of its 40% stake.
Taipower, which is an existing participant in the Bengalla JV, will increase its stake to 20% after the completion of the transaction.
In August, New Hope reached an agreement with Wesfarmers to purchase a further 40% stake in the Bengalla for A$860m ($635m).
At that time, Stephan had said “the acquisition of an additional interest in Bengalla demonstrates New Hope’s long term commitment to the Bengalla mine and a positive outlook for the global export thermal coal market.”
The Wesfarmers transaction is anticipated to close in early December 2018.
To fund the acquisitions of both Wesfarmers’ and Mitsui’s stakes in Bengalla, New Hope has entered into a A$600m ($434.3m) syndicated corporate debt facility and a A$300m ($217.1m) facility for performance bonds, letters of credit and other like contingent instruments.
New Hope said: “These facilities will be sufficient for the Company to also fund its medium term growth projects including New Acland Stage 3 and the potential development of the Burton Lenton project.”