Anglo American agrees sale of Dartbrook coal mine to Australian Pacific Coal
24 December, 2015
Anglo American plc (“Anglo American”) announces that it has entered into a Sale and Purchase Agreement (“SPA”) (and agreed to enter into a related Royalty Deed) with Australian Pacific Coal Limited (“AQC”) as guarantor and a subsidiary of AQC as purchaser to sell its 83.33% interest in the Dartbrook Coal Mine (“Dartbrook”) in the Hunter Valley, New South Wales, Australia.
Under the terms of the SPA and Royalty Deed, AQC will acquire Anglo American's interest in Dartbrook for up to A$50 million (approximately US$36 million), comprising an upfront cash payment of A$25 million and the grant of a royalty equal to A$3.0 for each tonne of coal produced by the operation in the future and A$0.25 for each tonne of coal sourced from other sites and processed using Dartbrook’s processing infrastructure. Royalty payments will be subject to escalation with reference to the Brisbane All Groups Consumer Price Index and capped at A$25 million (in real terms).
The transaction will be effected via a sale of shares in the subsidiary companies holding Anglo American's interest in Dartbrook. The transaction remains subject to several conditions precedent, including the waiver of pre-emption rights by Anglo American's joint venture partner, Marubeni Coal Pty Ltd (“Marubeni”) and the receipt of local and federal government consents for the transfer of the mining and exploration rights related to the operation. The transaction is expected to complete by mid-2016.
Dartbrook consists of an underground thermal coal mine and associated processing infrastructure that has been on care and maintenance since 2006. The agreed sale is consistent with Anglo American’s portfolio restructuring to focus it around its core of “Priority 1” assets.