Iron ore price weakens as Australia flags return to sub-$100 prices
Futures dropped for a fourth day in Singapore, to trade about 3% lower for the week.
BHP Group said on Wednesday Whitehaven Coal will acquire the mining giant’s Blackwater and Daunia mines, which are part of the BHP Mitsubishi Alliance (BMA) metallurgical coal joint venture in Queensland, for $4.1 billion.
Shares of Whitehaven surged nearly 15% to A$7.790 by 0403 GMT, their best intraday session in more than three years.
The sale decision furthers BHP’s push to exit its coal operations in Queensland, after the world’s largest-listed miner sold out of the South Walker Creek and Poitrel coal mines last year.
The miner has been working towards making a transition to commodities and away from coal-related assets as it seeks to enjoy the benefits of higher demand at a time when the focus shifts to industrial metals like copper and nickel.
BHP earlier this year acquired full control over Australian copper producer OZ Minerals, which is now delisted from the ASX 200 stock exchange, in a deal valued at A$9.6 billion ($6.12 billion). The miner had also offloaded its petroleum assets to oil and gas producer Woodside Energy in 2022.
The acquisition will be “materially earnings accretive” for the company, increasing the exposure to markets in India and Southeast Asia, Whitehaven said on Wednesday.
“This transformational acquisition will pivot our portfolio towards metallurgical coal, which has been a core pillar of our strategy for many years making this a better-balanced business,” Whitehaven CEO Paul Flynn said, adding that the miner’s thermal coal business remains strategically important.
BHP said it will continue to operate the assets until the June quarter of 2024 after which Whitehaven will take economic and operating control of the mines.
Separately, Whitehaven posted a near 33% surge in its first-quarter output as production ramp-up at its key Narrabri mine helped improve operations.
($1 = 1.5694 Australian dollars)
(By Roushni Nair and Rishav Chatterjee; Editing by Devika Syamnath and Sherry Jacob-Phillips)
Comments
Bobby44
At a time when folks want to move to a clean ESG portfolio it is nice to know there is still a return to be had from the dirty old fuel. Advise to Tech. Spin off the coal business and let the market decide. BTW I am in.