The sale of the Illawarra metallurgical business to an entity owned by Singapore’s Golden Energy and Resources (GEAR) and coal trader M Resources remains on track to be completed in the first half of the 2025 financial year, reported miner South32 on Tuesday.
Australian steelmaker BlueScope has waived its pre-emptive right to the assets under its long-term coal supply agreement (CSA) and offered its support for the transaction.
Illawarra supplies BlueScope’s Port Kembla steelworks with a blend of metallurgical coal from its Appin and Dendrobium mines.
"BlueScope has had strong engagement with GEAR and M Resources and looks forward to working with them as the new owners of Illawarra and as a long-term supplier to the Port Kembla steelworks," said BlueScope.
The company added that GEAR and M Resources had agreed to a number of improvements to the CSA, including a one-year extension of the contract to now expire in 2033, along with the commitment to undertake a detailed review process to support a potential extension of the supply of the Illawarra coal blend under the CSA beyond 2033
The Illawarra deal, which will see South32 exit coal, comprises a cash payment of $1.05-billion at completion and a deferred cash consideration of $50-million payable in 2030.
It is set to be completed in the first half of fiscal 2025, subject to conditions such as approval by the Foreign Investment Review Board.