Japanese steel giants strike joint venture deal with Whitehaven for Blackwater coal
Almost a third of the Blackwater coal mine in central Queensland will be sold to Japanese steel giants in a joint venture deal with Whitehaven Coal.
Three lives have been lost in three months, leading to operations being suspended at Oaky Creek. (Images AAP).
As part of the arrangements announced on Thursday, Whitehaven has entered into separate offtake agreements with Nippon Steel and JFE Steel.
Whitehaven also reported underlying earnings for the year to June 30 of $1.4 billion, including $272 million from the Daunia and Blackwater mines following the completion of their acquisition from BHP and Mitsubishi in April.
The underlying net profit of $740 million for the year was before $385 million in acquisition expenses including stamp duty, which meant the statutory net profit for the year was $355 million.
Whitehaven’s net debt position at June 30 was $1.3 billion, after the up-front acquisition payment of $US2 billion ($A3 billion) on April 2.
“While we have been growing the business, we have maintained focus on the NSW operations to deliver a solid financial result for FY24,” Whitehaven chief executive Paul Flynn said on Thursday.
“The business is very well positioned to continue to deliver strong returns for shareholders from both the metallurgical and thermal coal businesses.”
Whitehaven said it would benefit from global metallurgical coal supply constraints expected in the near and longer-term, combined with increased demand from India, that would drive prices higher.
Demand for thermal coal remains robust in Asia to fuel high-efficiency, low-emissions, or HELE, power generation and for use in general industry, the company said.
The separate deals with Nippon Steel (to own 20 per cent) and JFE Steel Corporation (10 per cent) are worth a combined $US1.08 billion ($A1.6 billion), and are expected to complete in the first quarter of 2025 subject to approvals.
Blackwater is one of the largest coal mines in Australia, with a strike length of 80km, and operations could extend beyond 50 years.
At completion, Nippon Steel and JFE Steel will each pay up front its pro-rata share, which Whitehaven said would strengthen the balance sheet.
Blackwater’s coal products are exported to customers across Asia through the RG Tanna Terminal north of Gladstone.
Whitehaven declared a fully franked final dividend of 13 cents per share
