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Central Qld coal mine sells for $340M

Ensham Coal Mine
Coal mine

A multinational conglomerate will be the next majority owner of a coal operation in Queensland’s Central Highlands region.

The Sungela joint venture (JV) recently acquired Idemitsu’s 85 per cent stake in the Ensham Coal Mine, 258km west of Rockhampton.

Ownership will be split between South African Thungela (75 per cent), Swiss-headquartered Audley Energy (12.5 per cent) and Brisbane-based Mayfair (12.5 per cent). QMEB can reveal the deal is worth US$240 million (A$340M).

The JV promises to keep the mine open, allowing Idemitsu to focus more on its Boggabri Coal Mine (118km northwest of Tamworth) where employees were offered a staggered 12 per cent pay rise over four years to match Ensham remuneration levels. The new enterprise agreement also promises a $4000 sign on bonus and other bonuses paid as an allowance plus arbitration for matters raised by the Mining and Energy Union.

“We remain committed to continuing to support Ensham’s workforce, the broader Idemitsu workforce and the Central Highlands community through the ownership transition process,” Idemitsu Australia CEO Steve Kovac said in a public statement.

“Idemitsu Australia is also actively pursuing interests in critical minerals to contribute the essential materials required for the global energy transition. This is demonstrated through our recent investments in red dirt metals (lithium), critical minerals group (vanadium) and vecco group (vanadium and electrolyte manufacture).”

The remarks came several months after Idemitsu appointed KPMG Corporate Finance as financial advisor, and Clayton Utz as legal counsel, for the sale. The Japan-headquartered company was previously expected to fetch $500M. Mainstream media had speculated potential buyers were likely to include Stanmore Coal, US-headquartered Peabody Energy Australia as well as Indonesia-backed BUMA Australia and Adaro Mining.

Ensham’s open-cut and underground operation employs about 600 people, and produces about 5.3M tonnes of coal a year. Final product is either transported to Gladstone Power Station for domestic electricity generation, or exported overseas via the Port of Gladstone.

Meanwhile, BHP is deciding whether to fast-track its 2030 closure of the Mount Arthur Coal Mine, 127km northwest of Newcastle.

The proponent blamed the hasty move on the New South Wales Government’s new mandate for coal producers to allocate 10 per cent of output for domestic use only.

“We are actively reviewing operational plans and existing commitments to understand their implications and, while I would like to avoid this scenario, the findings of this review may lead to a reassessment of our Pathway to 2030 plan,” BHP NSW energy coal vice president Adam Lancey said in a memo obtained by News Limited.

“Our primary concerns relate to the potential impacts on Mt Arthur Coal’s operations and business model, including what to do if our production costs are above the price cap as well as understanding potential impacts on local communities and infrastructure such as the rail network, our longstanding commercial partnerships, and our ability to meet our obligations to customers – and the energy market more broadly.”

For now management has offered affected BHP employees company-paid psychologist sessions.

“Please reach out to me directly if you have questions and, as always, make the most of our employee assistance program service if you would like to talk or receive some practical and emotional assistance,” Lancey said according to the media outlet.

“I understand this is a lot to take in but I wanted you to hear it from me first. Importantly, nothing changes right now.”

The State Government defended its energy security strategy, saying international demand for coal continues to boom.

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