BHP completes Blackwater and Daunia divestment

BHP (ASX: BHP) and Mitsubishi Development (MDP) have completed the divestment of the Blackwater and Daunia mines to Whitehaven Coal (ASX: WHC).

Both mines were part of the BHP Mitsubishi Alliance (BMA) metallurgical coal joint venture in Queensland. BHP and NDP each hold a 50% interest in BMA.

Whitehaven Coal paid BMA $3.07b (US$2b) cash consideration on completion, plus a preliminary completion adjustment of $67.73m (US$44.1m) for working capital and other adjustments.

On October 18, 2023, Whitehaven paid a $153.59m (US$100m) deposit on signing of the asset sale agreement.

There remains a cash payment of $1.69b (US$1.1b), payable by Whitehaven Coal to BMA over three years post completion. A potential additional amount of up to $1.38b (US$900m) in a price-linked earnout may also be payable by Whitehaven to BMA over three years.

Whitehaven managing director and chief executive Paul Flynn says this is a significant milestone for the company.

“This is a significant milestone for Whitehaven that transforms us into a leading metallurgical coal producer and will deliver benefits for all of our stakeholders,” he said.

“We are well placed to execute a smooth transition and to integrate the Daunia and Blackwater mines into the Whitehaven portfolio.

“We are excited to welcome the teams at Daunia and Blackwater into our business and we look forward to working with the local community and other stakeholders who will remain an important part of our operations.”