The sale is part of in the British-Australian mining giant Rio Tinto’s efforts to divest all of its coal assets.
Yancoal Australia chief executive officer Reinhold Schmidt said: “Today’s FIRB approval is a positive step forward for Yancoal, its shareholders and the Hunter Valley, demonstrating the Australian Government’s support for continued investment into the local resources sector.”
The deal remains subject to a number of further closing conditions, including Rio Tinto shareholder approval and Yanzhou shareholder approval.
It is expected to be closed in the third quarter of 2017.
Earlier, Yancoal said that it would finance the transaction via a capital raising and pro-rata entitlement offer of ordinary shares.
The acquisition is part of Yancoal’s strategy to position itself as a major pure-play coal producer in Australia.
Coal & Allied holds stake in the Hunter Valley Operations (HVO) mine and the Mount Thorley Warkworth (MTW) mines.
It owns 67.6% stake in the Hunter Valley Operations mining complex, 80% interest in the Mount Thorley mine, 55.6% in the Warkworth mine and other undeveloped coal assets, including various landholdings.
The firm also has 36.5% stake in Port Waratah Coal Services, a coal export terminal located at the Port of Newcastle.
While JP Morgan Australia and Morgan Stanley Australia acted as financial advisors to Yancoal in the transaction, Herbert Smith Freehills was its legal advisor.
Image: It is expected to be closed in the third quarter of 2017.
