Mining giant BHP has sold two of its central Queensland coal mines for more than $US4 billion.
Key points:
- Whitehaven Coal has been announced as the successful bidder to buy the Blackwater and Daunia mines
- The mines employ 2,500 people between them
- The two mines are widely accepted as producing some of the world's best coking coal for steelmaking
Australian company Whitehaven Coal has purchased the Blackwater and Daunia mines which produce some of the world's highest quality coking coal for steelmaking.
The Blackwater site, located south-east of Emerald, is also one of the southern hemisphere's longest coking coal mines, with a striking rate of 80 kilometres.
Daunia is located south-east of Moranbah in the Bowen Basin and has only been operational since 2013.
The mines are part of the BHP Mitsubishi Alliance (BMA) metallurgical coal joint venture in Queensland.
BHP and MDP (Mitsubishi Development) each hold a 50 per cent interest.
BHP announced its intention to offload the two mines earlier this year, as it continues to shift its focus on materials tied to renewable energy, such as copper and nickel.
BMA last year sold two of its other central Queensland mines, South Walker Creek and Poitrel, leaving the alliance with seven sites in the Bowen Basin, including Daunia and Blackwater.
The mines employ more than 2,500 people between them.
Concerns for workers
The Mining and Energy Union (MEU) has welcomed the sale and said it had received assurances from Whitehaven that workers would remain covered by existing enterprise agreements and that all workers employed through BHP's labour hire subsidiary Operations Services (OS) would be offered permanency on site enterprise agreement conditions.
"Nearly 400 OS workers and their families will be celebrating this news and can look forward to a substantial improvement to their pay and conditions," MEU acting Queensland district president Mitch Hughes said.
"Meanwhile, the permanently employed workforce can rest assured that their existing pay and conditions will be retained."
Whitehaven chief executive Paul Flynn said he expected the demand for coal to remain high, despite the global energy transition for several decades, while earlier this year, BHP indicated job security would not be a concern in the current market.
"Daunia and Blackwater produce much-needed metallurgical coal that is in high demand across Asia – including in India and south east Asia where population growth and economic development is expected to drive strong demand for steel production and metallurgical coal through to at least 2051," Mr Flynn said.
"We look forward to completing the transaction and welcoming the teams at Daunia and Blackwater into the Whitehaven business, and working with other stakeholders who will remain an important part of our operations.
The sale, which equates to nearly AU $6.5 billion, is still subject to the satisfaction of certain conditions, including competition and regulatory approvals.
It is expected to be finalised by June 2024, at which point Whitehaven will take over operations.