Peabody sells majority of Burton mine for $11m

PERTH (miningweekly.com) – US coal major Peabody Energy struck a deal with the Lenton joint venture (JV), in which ASX-listed New Hope Corporation holds a 90% interest, to divest of the majority of its Burton mine, in Queensland, for $11-million.

The Lenton JV will assume the reclamation obligations associated with the assets being acquired by the Lenton JV, reducing Peabody's asset retirement obligation by about $53-million, while also releasing an estimated $30-million of restricted cash.

The transaction was subject to a number of conditions, including regulatory approval, and the transaction was expected to be complete by the first half of 2018.

The Burton mine was placed on care and maintenance in December 2016.

The Lenton JV controls a number of tenements around the Burton mine, including the Lenton opencut project where New Hope had an environmental authority to allow for mining of up to two-million tonnes a year, with the company exploring options to ramp up this potential production to 3.5-million tonnes a year.

Peabody emerged from US Chapter 11 bankruptcy protection in April.

The Burton mine transaction is one of several deals under way in the Australian coal market.

Last week, Yancoal Australia and Rio Tinto completed the $2.69-million Coal & Allied transaction, with Yancoal taking control of the mining major’s thermal coal business in the Hunter Valley region of New South Wales.

Diversified major Glencore and its JV partners Itochu and Sumitomo have also put their Rolleston thermal coal mine, in Queensland, on the market. The JV partners are now looking for a buyer for the mine, which produced 13.3-million tonnes of saleable coal last year.