Wesfarmers Announces Agreement to Sell Curragh Coal Mine

Wesfarmers today announced it has agreed to sell its Curragh coal mine in Queensland to Coronado Coal Group for $700 million under an agreement which also includes a value share mechanism linked to future metallurgical coal prices.

On successful completion of the transaction, Wesfarmers estimates it would report a post-tax profit on sale of approximately $100 million. Reflecting recent volatility in spot coal prices, Wesfarmers will also receive 25 per cent of Curragh’s export coal revenue generated above a realised metallurgical coal price1 of $US145 per tonne, paid quarterly over the next two years.

Curragh is one of the world’s largest metallurgical coal mines, with baseline production of 8.5 million tonnes per annum (mtpa) of export metallurgical coal and 3.5 mtpa of steaming coal which is sold to the Queensland Government’s Stanwell Corporation. The proposed transaction includes the Curragh mine assets and Mineral Development License 162.

Coronado Coal Group is a leading US producer of metallurgical coal with three mining complexes in West Virginia and Virginia currently producing 8.2 mtpa.

The sale is subject to a number of conditions precedent including obtaining approval from the Foreign Investment Review Board. Work is underway to achieve satisfaction of the conditions precedent in the next six months.


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