“This sale supports our actions to strengthen the Australian portfolio, which remains core to Peabody, and is consistent with the strategy outlined in our business plan,” said President and Chief Executive Officer Glenn Kellow. “We expect the transaction to be accretive to the value reflected in the business plan, generate meaningful proceeds for the Australian business, decrease future capital expenditure needs, and reduce risk to the Australian platform as we pursue a smaller but more profitable portfolio going forward.”
South32 Chief Executive Officer Graham Kerr said, “The Metropolitan Colliery is a natural fit within our portfolio and the acquisition is consistent with our strategy to invest in high-quality mining operations where we can create value. The mine’s recently upgraded infrastructure and close proximity to Illawarra Metallurgical Coal will enable us to further optimize performance and unlock unique blending and resource synergies.”
The transaction is not expected to have any impacts on the mine staff, workforce or community. The mine employs approximately 250 mine-site employees and as of December 31, 2015, has approximately 28 million tons of proven and probable reserves.
The transaction is expected to happen in the first quarter of 2017, subject to clearance by the Australian Competition and Consumer Commission. The sale is not subject to a financing condition as South32 intends to fund the transaction using existing cash on hand.
South32 Ltd. is a mining and metals company with operations in Australia, Southern Africa and South America. Peabody Energy is the world’s largest private-sector coal.
