Yancoal Australia (ASX:YAL) has entered a binding sale and purchase agreement to acquire a whole stake in Kestrel Coal Group for a total consideration of US$2.4 billion ($3.36 billion).
The vendors for this agreement include EMR Capital Advisors, Kestrel Coal, Adaro Capital, and EMR Capital Management, providing Yancoal with an 80% stake in the Kestrel Coal Mine in Queensland’s Bowen Basin.
The total consideration includes an upfront cash payment of US$1.85 billion, which is payable on completion of the sale, and contingent cash consideration of up to US$550 million.
The contingent cash consideration will be paid annually over a five-year period.
Yancoal will fund the acquisition costs with available cash, a US$1.2 billion five-year syndicated acquisition loan facility, and cash flows generated from the business.
The company is also orchestrating a US$200 million committed working capital facility, with a five-year term period, to support liquidity requirements.
Yancoal CEO Sharif Burra says the proposed acquisition represents a “strong fit for Yancoal and adds another high-quality, long-life mine” to the company’s portfolio.
“Kestrel delivers increased scale and diversification to Yancoal’s portfolio and is expected to contribute premium metallurgical coal into our product mix,” Burra says.
“The acquisition positions us to deliver greater value to our shareholders and consolidates Yancoal’s position as a leading Australian coal miner.
“We look forward to working closely with Mitsui, the joint venture partner and owner of 20% of Kestrel, in the future as co-owners of Kestrel to continue to add value to the mine, local communities, and stakeholders.”
The Kestrel Coal Mine is the largest producing underground coal mine in Australia, reaching a record saleable production of 5.9 million tonnes in 2025.
Write to Maddison Elliott at Mining.com.au
Images: Yancoal
