The sale by diversified miner South32 of Illawarra Metallurgical Coal is step closer with the approval of the transaction by the Australian Foreign Investment Review Board.
South32 planned to sell New South Wales-based Illawarra to an entity owned by Golden Energy and Resources and M Resources by the first quarter of the 2025 financial year, it said in a statement on Friday. It had previously expected the transaction to close in the first half of the 2025 financial year.
South32, which is valued at about R212 billion on the JSE and A$17.3 billion on the Australian Securities Exchange, is selling Illawara for up to $1.65 billion, making headway in its strategy to simplify and reduce capital intensity.
The deal will see the buyer assuming economic and operating control of Illawarra, including all current and future liabilities.
Illawarra Metallurgical Coal produces premium-quality, hard coking coal for steelmaking. Its buyers are established participants in the Australian metallurgical coal industry.
South32 said the disposal would allow it to focus on its operating positions and growth options in the aluminium value chain, base metals and manganese.
South32 CEO Graham Kerr said previously the transaction would realise significant value for shareholders and was consistent with its strategy to reshape its portfolio towards commodities critical in the transition to a low-carbon future.
“It will streamline our portfolio, strengthen our balance sheet and unlock capital to invest in our high-quality development projects in copper and zinc.”
The South32 board in mid-February gave the green light for the development of a new zinc mine at its Hermosa project in Arizona, US.
The development is expected to bolster South32’s supply of critical commodities and reshape its portfolio towards commodities that are critical to a low-carbon future.
The Perth-based miner, which was spun off from BHP in 2015, is the world’s biggest producer of manganese. It also produces bauxite, alumina, aluminium, copper, silver, lead, zinc, nickel and metallurgical coal from its operations in Australia, Southern Africa and South America.