Whitehaven Coal has acquired 100% of both the Blackwater and Daunia mines which produce some of the highest quality coal for steelmaking and has reaffirmed Whitehaven as Australia’s leading metallurgical coal company.
BHP has netted $US4 billion from the sale of two of its Queensland mines.
Blackwater was first opened in 1967 south-east of Emerald. It is one of the longest coal mines in the Southern Hemisphere, with a strike length of 80 kilometres.
The Daunia mine is a much newer site, having only opened in 2013 south-east of Moranbah. Both mines are part of the BHP Mitsubishi Alliance metallurgical coal joint venture in Queensland – BHP and Mitsubishi each sold a 50 per cent interest in the mines to Whitehaven.
In their presentation to investors, Whitehaven outlined several reasons why they chose to purchase the mines as they believed it wouldn’t just benefit them in the short term but also the long term.
The life of the Blackwater mine could extend beyond 50 years while Daunia’s production is expected until at least the 2040 financial year.
The purchase increases Whitehaven’s total coal resources from 2.6 billion to 4.6 billion tonnes for operating and development mines and their reserves have also increased by 29 per cent.
Whitehaven now has another 2,530 employees on its books and a greater share of the market with exposure to India and Southeast Asia.
Whitehaven CEO and Managing Director Paul Flynn said the transaction accelerates and transforms the company, but also delivers substantial value for shareholders.
“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.
“This is a highly attractive and materially earnings accretive acquisition, with considerable upside potential, which we expect will deliver meaningful returns to our shareholders for many years to come. It strengthens our portfolio of quality, long life assets in attractive locations providing geographic and operational diversification and scale benefits.
“We look forward to completing the transaction and welcoming the teams at Daunia and Blackwater into the Whitehaven business, and working with the local community and other stakeholders who will remain an important part of our operations.”