Australian diversified miner South32 Ltd said on Thursday it is selling its Illawarra metallurgical coal project in New South Wales to an entity owned by Golden Energy and Resources (GEAR) and M Resources for up to $1.65 billion.
The deal comprises an upfront payment of $1.05 billion at completion, and a deferred cash consideration of $250 million payable in 2030, among others.
The buying entity will assume economic and operating control of Illawarra on completion of the deal, including all current and future liabilities.
The Illawarra project generated $1.64 billion underlying revenue in fiscal 2023 for South32, about 18.2% of its total underlying revenue of $9.05 billion.
The deal is expected to complete in the first half of fiscal 2025, subject to certain conditions including an approval from the Foreign Investment Review Board.
South32 CEO Graham Kerr said the deal will streamline the company’s portfolio and unlock capital to invest in development projects in copper and zinc.
“The transaction will also simplify our business and reduce our capital intensity,” Kerr added.
GEAR would hold 70% of the project, while M Resources would hold rest of the stake, post completion of the deal.
(By Echha Jain; Editing by Maju Samuel and Shailesh Kuber)
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