After buying BHP’s 80 per cent interest in BHP Mitsui Coal (BMC) in May, Stanmore Resources has just purchased the remaining 20 per cent from Mitsui & Co.
Following the initial transaction, BMC was renamed Stanmore SMC, which now controls the South Walker Creek and Poitrel metallurgical coal mines in the Bowen Basin.
Stanmore chief executive officer Marcelo Matos said acquiring the remaining stake in SMC was a logical move.
“Following the previous acquisition of the majority interest in SMC from BHP, this transaction allows Stanmore to consolidate its position as a leading metallurgical coal miner in the Bowen Basin,” he said.
“Having 100 per cent control of South Walker Creek and Poitrel, as well as Wards Well and other projects, allows Stanmore to maximise value amongst our assets in the region.”
Through its subsidiary Dampier Coal, Stanmore will be required to pay $US380 million ($535.8 million) to Mitsui & Co. upon completion of the deal.
Stanmore anticipates SMC will shortly declare a significant dividend to its shareholders, which it can use to lessen the total price paid to Mitsui.
Given current market conditions, Stanmore said it intends to fund the transaction through internal sources without the need for any new debt or capital to be raised.
The deal is expected to be completed in the final quarter of 2022.
Stanmore has also announced record underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) of $US726 million ($1.02 billion) for the first half of 2022.
The coal miner’s sales volumes increased by 2.09 million tonnes compared with the first half of 2021, with production from South Walker Creek and Poitrel coming online from May 3.
Stanmore also enjoyed an average realised coal price of $US377 ($532) per tonne, which represents the current market conditions in the wake of the Russia–Ukraine conflict.
Matos said despite the soaring coal price, the company hadn’t been immune from disruptions.
“We have experienced an unprecedented market and peak prices in the first half of 2022, although have seen a major correction since then mostly resulting from the impact of global inflationary pressures, global supply-chain disruptions and tightening monetary policy,” he said.
“Despite the short-term adjustments taking place, we remain confident on the met coal market fundamentals and expect tight supply to continue going forward, with long-term demand supported by the continued growth in steel production and the industrialisation of South East Asia and India.”