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BHP To Divest Its 80% Interest In BHP Mitsui Coal

BHP said that it agreed to divest its 80 percent interest in BHP Mitsui Coal, an operated metallurgical coal joint venture in Queensland.

Stanmore SMC Holdings Pty Ltd, a wholly owned subsidiary of Stanmore Resources Limited, has agreed to acquire 100 per cent of the shares in Dampier Coal (Queensland) Pty Ltd from BHP Minerals Pty Ltd, for cash consideration of up to US$1.35 billion.

The purchase price comprises US$1.1 billion cash on completion, US$100 million in cash six months after completion and the potential for up to US$150 million in a price-linked earnout payable in the 2024 calendar year.

Stanmore Resources would assume economic and operating control of BHP Mitsui Coal on completion of the sale, including its share of all current and future liabilities of BHP Mitsui Coal subject to certain limited exceptions. Completion is expected to occur in the middle of the 2022 calendar year.

BHP will provide certain transitional services to Stanmore Resources for a short period of time after completion.

Golden Energy and Resources Limited, a Singapore Exchange listed company and Stanmore Resources' major shareholder, guarantees Stanmore Resources' obligations to pay the purchase price and any break fee obligations to BHP up to US$600 million.

BHP noted that the review process for New South Wales Energy Coal is progressing, in line with the two-year timeframe announced in August 2020. BHP remains open to all options and continues consultation with relevant stakeholders.

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