Whitehaven Coal is set to acquire EDF Trading Australia for US$72 million ($106.5 million), allowing the company to increase its stake in the Narrabri mine in New South Wales.
EDF owns a 7.5 per cent interest in the Whitehaven-operated Narrabri operation, with Whitehaven’s interest to increase to 77.5 per cent following the completion of the agreement.
For Whitehaven, the acquisition represents an attractive opportunity to increase its majority stake in a “world-class underground asset.”
It also anticipates the deal will further consolidate the company’s position in the Gunnedah Basin where it is the region’s single largest private sector employer.
EDF originally acquired the 7.5 per cent stake from Whitehaven in December 2008, which included a coal off-take contract in excess of 50 million tonnes over the life of the Narrabri north mine.
The total consideration for the acquisition is $US72 million, which comprises a $US17 million payment on completion of the deal and the remaining $US55 million over five years.
Completion of the transaction is subject to standard conditions and has an effective date of July 1 2019.
The initial deal was valued at $US120 million which was paid in three tranches over the following three calendar years.
Narrabri is undergoing extensions to increase the mine’s production from 11 million tonnes per annum to 13 million tonnes per annum. This will also result in an extension of the life of the mine from 2031 to 2045.
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