November 8, 2021 Read More →

BHP cuts coal exposure with coking mine sales

The Sydney Morning Herald:

BHP, the nation’s largest mining company, is continuing to reduce its exposure to fossil fuels with a deal to sell two Queensland coking coal mines to ASX-listed Stanmore Resources.

The deal, under which Stanmore has agreed to pay $US1.2 billion ($1.6 billion) to acquire BHP’s 80 per cent stake in the BHP-Mitsui Coal joint venture’s Poitrel and South Walker Creek mines in the Bowen Basin, marks the latest step in the company’s push to better-align its portfolio with global decarbonisation efforts.

“As the world decarbonises, BHP is sharpening its focus on producing higher-quality metallurgical coal sought after by global steelmakers to help increase efficiency and lower emissions,” BHP head of Australian mining Edgar Basto said. “This transaction is consistent with BHP’s strategy, delivers value for our company and shareholders and provides certainty for BHP-Mitsui Coal’s workforce and the local community.”

The two mines produce about 10 million tonnes a year of coking coal, which is combined with iron ore in steel-making furnaces to create molten pig iron. BHP said it would continue to operate the assets until the deal’s completion and would provide “transitional services” to Stanmore for a short period.

If a deal is completed, BHP’s only remaining coking coal mines would be its higher-quality hard coking coal mines jointly owned with Mitsubishi, which it believes will be increasingly needed to meet the world’s ongoing steel demand, including to build clean-energy infrastructure such as wind turbines.

BHP has been actively looking to get out off thermal coal, which is used in power generation and ranks as the world’s biggest source of greenhouse gas emissions. On Monday, the miner said it remained in the process of looking for a buyer for its last thermal coal mine, at Mt Arthur in the NSW Upper Hunter.

[Nick Toscano]

More: BHP sells Australian coking coal mines to Stanmore Resources in $US1.2b deal

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