Conditions satisfied for Illawarra Metallurgical Coal sale

All conditions relating to the sale of South32’s (ASX: S32) Illawarra Metallurgical Coal in NSW have been completed with the transaction expected to be complete in September 2024.

In February 2024, South32 announced it had entered a binding agreement to sell Illawarra to an entity owned by Golden Energy and Resources and M Resources for $1.98b (US$1.3b) plus a contingent consideration of up to $533m (US$350m).

The sale was subject to the satisfaction of certain conditions which have now been completed.

When announcing its intention to sell Illawarra, South32 chief executive Graham Kerr said it will streamline the company’s portfolio.

“This transaction will realise significant value for our shareholders and is consistent with our strategy to reshape our portfolio toward commodities critical in the transition to a low-carbon future,” he said.

“It will streamline our portfolio, strengthen our balance sheet and unlock capital to invest in our high-quality development projects in copper and zinc.

“The transaction will also simplify our business and reduce our capital intensity.”

Illawarra Metallurgical Coal produces high-quality metallurgical coal, a key component in the production of steel, which will be required in the steelmaking process until low-carbon steel becomes economically viable on a commercial scale.

Mr Kerr commented on the sale.

“The sale of Illawarra metallurgical coal is a significant milestone in the transformation of our portfolio towards commodities critical to a low-carbon future,” he said.

“I would like to thank our colleagues at Illawarra metallurgical coal for the contribution they have made to our business and wish them every success for the future.”