BHP to sell interest in BHP Mitsui Coal to speed up decarbonization plan

BHP has signed an agreement to sell its 80% interest in BHP Mitsui Coal (BMC) to Stanmore SMC Holdings Pty Ltd as part of its decarbonization plan, the Anglo-Australia multinational announced on Monday November 8.

BMC comprises the Poitrel and South Walker Creek operations, Red Mountain Infrastructure and the Wards Well development in Queensland, Australia.

Stanmore SMC Holdings Pty Ltd has agreed to acquire 100% of the shares in BHP’s subsidiary Dampier Coal (Queensland) Pty Ltd, which holds BHP’s interest in BMC, up to $1.35 billion. Completion of the sale is expected to occur in the middle of the 2022 calendar year.

“As the world decarbonizes, BHP is sharpening its focus on producing [the] higher-quality metallurgical coal sought… by global steelmakers to help increase efficiency and lower emissions,” BHP Minerals Australia president Edgar Basto said.

BHP commenced a review of its lower-grade metallurgical coal and thermal coal assets in August 2020. Since then, the company has announced the divestment of its interests in BMC in Queensland and the Cerrejón mine in Colombia.

Fastmarkets’ weekly index for PCI low-vol, fob DBCT was $251.65 per tonne on November 5, down by $16.44 per tonne week on week. The drop was affected by recent fall in thermal coal price.