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New Hope buys 40% in Bengalla from Wesfarmers

New Hope buys 40% in Bengalla from Wesfarmers

Photo by Bloomberg

7th August 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Coal miner New Hope Corporation has struck an A$860-million deal with fellow-listed Wesfarmers to purchase a further 40% interest in the Bengalla joint venture (JV), in New South Wales.

News of the transaction that will increase New Hope’s holding in the project to 80% has lifted New Hope’s share price by about 12% since Monday when it was announced. The stock traded at A$3.50 a share on Tuesday afternoon, from Monday morning’s A$3.09.

The miner said its final interest in the Bengalla project would be dependent on the actions of the other joint venture partners Mitsui and Taipower, during the pre-emptive rights process under the JV deed.

“The acquisition of an additional interest in Bengalla demonstrates New Hope’s long-term commitment to the Bengalla mine and a positive outlook for the global export thermal coal market,” said New Hope MD Shane Stephan.

Wesfarmers MD Rob Scott said the agreement to sell the company’s interest in Bengalla followed the completion of the sale of its Curragh coal mine, to Coronado Coal in March this year, and subject to completion, would finalise Wesfarmer’s review of its resource business, which was initiated in 2016.

“We believe this agreement with New Hope is in the best interest of our shareholders and ensures a smooth transition in the ownership of the Bengalla JV,” Scott said.

“Bengalla has made strong returns to Wesfarmers shareholders since our initial interest was acquired in 2001, and it is pleasing the extensive, disciplined and patient review of our coal business has resulted in outcomes which reflect the value of these world-class assets.”

The Bengalla mine supplies domestic and export markets with thermal coal from an opencut operation, and is approved for up to 15-million tonnes of run-of-mine coal a year.

The transaction with New Hope is subject to regulatory approvals, as well as the pre-emptive rights, with the two companies expecting the sale to be finalised in the fourth quarter of this year.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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