At the end of the acquisition, Yancoal will own approximately 84.5% of the Warkworth joint venture, which increases its share of coal production from the integrated Mount Thorley Warkworth operations from 64.1% to 82.9%. Mount Thorley Warkworth produced 12.3 million metric tons in 2016.
Yancoal Australia Chief Executive Officer Reinhold Schmidt said, “By exercising the call option, we are strengthening our position within the Hunter Valley and progressing our long-term strategy for continued growth and investment into tier one assets.”
This deal comes just a couple months after Yancoal beat out Glencore to purchase Coal & Allied Industries from Rio Tinto for US$2.45 billion. Yancoal then turned around and agreed to sell a 49% interest to Glencore for US$1.139 billion plus a 27.9% share of US$240 million non-contingent royalties over five years and 49% of price contingent royalties payable by Yancoal to Rio Tinto.