IN A US$75 million deal, Wilkie Creek coal mine has been sold by Peabody Energy to Sekitan Resources Pty, Ltd., a wholly owned subsidiary of Exergen Pty, Ltd.
The sale and purchase agreement for the mine, which had been on the block for more than two years, was announced by Peabody last week.
The transaction has an aggregate value for Peabody of up to US$75 million including cash of up to $20 million and assumption of liabilities totalling $55 million. The deal also releases certain guarantees in place for reclamation activities.
Closing is expected in the third quarter of 2015, subject to satisfaction of certain conditions.
The acquirer, Exergen, is an Australian clean coal company that uses ‘vertical autoclave technology’ to reduce emissions by dewatering high moisture coal.
Exergen claims its new technology, teamed with modern coal-fired power station technology, will deliver up to 40 per cent emissions reductions.
The latest sale agreement for Wilkie Creek follows the collapse last year of a proposed acquisition plan by former coal mining magnate Nathan Tinkler, which included a sale price of $70 million plus assumption of liabilities.
Peabody terminated that agreement after the Tinkler-owned company coughed up a $5 million non-refundable deposit for the mine, but then missed a string of payment deadlines.
Peabody put the Wilkie Creek coal mine up for sale in January 2012 and later reduced operations before finally closing it in December 2013.
Some 200 employees and contractors lost their jobs at the time of the closure which followed the axing of 70 jobs just three months earlier.
Peabody cited high operation costs, lower market prices and the introduction of the carbon tax as the reasons behind the mine closure.
The Wilkie Creek mine, which began operations in 1994, was acquired by Peabody Energy in 2002 and produced more than 2 million metric tons of thermal coal annually for export.
The mine has lease tenements covering an area of 1128 hectares surrounding the site and Peabody had previously applied for an expansion plan to allow it to mine coal in new areas and extend the life of the mine.