Japan’s Sojitz has agreed to acquire the Gregory Crinum coking coal mine in central Queensland, Australia from BHP Billiton and Mitsubishi Development for A$100m ($75.8m).
Image: Map showing the location of the Gregory Crinum coking coal mine. Photo: courtesy of Sojitz Corporation.
BHP and Mitsubishi, currently own the mine through a 50:50 joint venture named BHP Billiton Mitsubishi Alliance (BMA).
The partners decided to offload the coal mine following a review that concluded there is potential for another party to derive greater value at the mine.
BMA asset president Rag Udd said: “This is a great outcome for the parties to the transaction and for the region. This will provide further employment in Emerald, and additional royalties and taxes to the people of Queensland”.
Located in the Bowen Basin, 60km north east of Emerald, Gregory Crinum is a hard coking coal mine, which had a capacity of six million tonnes of hard coking coal per annum prior to the suspension of its production in 2016. Since then, the mine has been put under care and maintenance.
Currently, Sojitz holds stakes in the Minerva coal mine and the Meteor Downs South (MDS) mine, both in Queensland, where it has taken up the roles of manager and operator.
The Japanese firm said that the acquisition of Gregory Crinum will leverage from the expertise at Minerva and MDS while consolidating its coking coal business. Further, it will also rebalance its coal assets, which are presently tilted towards thermal coal.
Sojitz said that the Gregory Crinum mine still has adequate amount of coking coal reserves and has revealed its plans to restart production as early as completion of the deal.
The company, in a statement, said: “While putting the Gregory Crinum back on line, Sojitz also plans to provide contract mining and related services to other nearby greenfield developments.
“In doing so, Sojitz aims to develop a stable business that is not exposed to the volatility of resources price, and to contribute to the local community through creating more jobs.”
The Gregory Crinum site features the Crinum underground mine, Gregory open cut mine and undeveloped coal resources. The on-site infrastructure at the site includes a coal handling and preparation plant, administration facilities and maintenance workshops.
Apart from selling the mine, BMA will take responsibility of covering appropriate funding needed for rehabilitation of existing areas of disturbance at the site with Sojitz to take over all rehabilitation liabilities.