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BHP made headlines when it announced its plan to divest the Daunia and Blackwater coal mines in Queensland, and now it seems Yancoal Australia is interested in getting its hands on them.

In an interview with the Australian Financial Review, Yancoal chief executive officer David Moult indicated that while the company had other potential investment opportunities, it is definitely interested in a bid for the two coking coal mines.

“For the moment our preference would be to stay focused on the BHP assets and make sure we are successful there,” Moult said.

“That is the one we are going to be focused on now and that is where we are going to be putting in our effort because it does fit very well with us.”

The potential purchase would draw from Yancoal’s immense pool of resources – a comfortable $2.7 billion cash on hand as reported in its full year financial results just last week.

An unprecedented jump in the price of coal – thanks to a global energy crisis – contributed to a record year for Yancoal, with the company reporting a revenue of $10.55 billion, up from $5.14 billion in 2021.

BHP, on the other hand, reported a 27 per cent drop in its profit from operations, driven by a reduction in iron ore and copper prices.

In addition to BHP’s falling profits,, the Queensland Government’s controversial coal royalty tax has been cited as a catalyst for the decision to sell the two mines, both of which are jointly owned by BHP and Mitsubishi as part of the BHP Mitsubishi Alliance (BMA).

The controversial three-tiered royalty system slaps producers with a 40 per cent tax on all coal prices above $300 per tonne at the highest bracket.

The middle tier enforces a 30 per cent tax above $225, while the lower end demands 20 per cent above $175.

BHP made it clear that the company would not make any “significant new investments” in Queensland due to the coal royalty tax, saying that the state had become “uncompetitive”.

“Uncertainty caused by the unplanned increase in royalties did come into play as a contributing factor in our decision making (to divest the two mines),” BMA asset president Mauro Neves said.