Whitehaven Coal to acquire Daunia and Blackwater coalmines

Whitehaven Coal has announced it has executed definitive sale agreements with BHP Group (BHP) and Mitsubishi Development Pty Ltd (together, BMA) to acquire 100% of both the Daunia and Blackwater coalmines for an aggregate cash consideration of US$3.2 billion.

The company said the purchase will deliver significant value upside with attractive growth opportunities in Queensland’s Bowen Basin, including synergies with Whitehaven’s Winchester South development project, and will transform Whitehaven into a metallurgical coal producer with pro-forma managed run-of-mine (ROM) production of around 40 million tonnes per annum and pro-forma revenues of around 70% metallurgical coal and 30% thermal coal.

Whitehaven also said it increases the company’s exposure to high-growth market regions including India and Southeast Asia, while strengthening and diversifying end market exposures currently focused on Japan, South Korea and Taiwan.

Completion of the acquisition is expected in the June 2024 quarter subject to satisfying conditions precedent including regulatory and merger control approvals.

“This is a compelling transaction for Whitehaven that accelerates our strategy, transforms our company and delivers substantial value for our shareholders,” said Paul Flynn, CEO and Managing Director of Whitehaven. “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. Our thermal coal business remains strategically important as we continue to provide much-needed coal products to support the global energy transition and as customers seek our high-quality and high-CV products to limit their emissions.

“Daunia and Blackwater produce much-needed metallurgical coal that is in high demand across Asia — including in India and Southeast Asia where population growth and economic development are expected to drive strong demand for steel production and metallurgical coal through to at least 2050. This acquisition will increase our exposure to these high-growth market segments while expanding our regional footprint through new customers.”

Image: Blackwater coal mine. Source: BHP.