New Hope bol­sters Ben­galla mine stake

The Australian Mining Review - - NEWS - REUBEN ADAMS NSW

NEW Hope Cor­po­ra­tion will buy out West­farm­ers’ 40 per cent in­ter­est in the lu­cra­tive Ben­galla Joint Ven­ture for $860 mil­lion.

This rep­re­sents a slight dis­count on the $865m New Hope paid for its orig­i­nal 40 per cent stake at the bot­tom of the mar­ket in 2016.

New Hope’s ac­qui­si­tion of the orig­i­nal 40 per cent in­ter­est in Ben­galla from Rio Tinto in March 2016 – a few months prior to the start of the re­cent coal price surge – was per­fectly timed.

New Hope ended months of spec­u­la­tion when it reached a bind­ing com­mit­ment with JV part­ner Wes­farm­ers in August this year, with its share price rock­et­ing from $3.19 to $3.54 on the news; its high­est level since Jan­uary 2014.

Fol­low­ing com­ple­tion of the trans­ac­tion – a com­bi­na­tion of cash and new debt – which is an­tic­i­pated to oc­cur in late 2018, New Hope will own up to an 80 per cent in­ter­est in Ben­galla.

“The ac­qui­si­tion of an ad­di­tional in­ter­est in Ben­galla demon­strates New Hope’s long term com­mit­ment to the Ben­galla mine and a pos­i­tive outlook for the global ex­port thermal coal mar­ket,” New Hope man­ag­ing di­rec­tor Shane Stephan said.

The highly prof­itable Ben­galla thermal open cut min­ing op­er­a­tion, south west of Muswell­brook in the Hunter Val­ley re­gion of NSW, has reg­u­la­tory ap­proval for up to 15 mil­lion tonnes per an­num run-of-mine ca­pac­ity.

Wes­farm­ers man­ag­ing di­rec­tor Rob Scott said the agree­ment to sell its in­ter­est in Ben­galla fi­nalised the con­glom­er­ate’s exit from re­sources, fol­low­ing the sale of the Cur­ragh coal mine to Coron­ado Coal in March this year.

“We be­lieve this agree­ment with New Hope is in the best in­ter­ests of our share­hold­ers and en­sures a smooth tran­si­tion in the own­er­ship struc­ture of the Ben­galla joint ven­ture,” Mr Scott said.

“Ben­galla has made strong re­turns for Wes­farm­ers share­hold­ers since our ini­tial in­ter­est was ac­quired in 1991 and it is pleas­ing the ex­ten­sive, dis­ci­plined and pa­tient re­view of our coal busi­nesses has re­sulted in out­comes which re­flect the value of these world-class as­sets”.

Mr Stephan also stated that New Hope re­mained com­mit­ted to se­cur­ing ap­proval for the con­tin­u­a­tion of its other key as­set, the New Acland mine in south­ern Queens­land.

New Hope is still seek­ing ap­provals to be­gin de­vel­op­ment of the $900m New Acland ex­ten­sion, which is back in the Land Court for fur­ther con­sid­er­a­tion af­ter the Queens­land Supreme Court over­turned an ear­lier rul­ing op­pos­ing the ex­pan­sion in May this year.

“The ac­qui­si­tion of an ad­di­tional in­ter­est in Ben­galla demon­strates New Hope’s long term com­mit­ment to the Ben­galla mine and a pos­i­tive outlook for the global ex­port thermal coal mar­ket.”

Im­age:NewHopeGroup.

New Hope man­ag­ing di­rec­tor Shane Stephan.

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