Yancoal Australia has agreed to purchase a further 3.75 per cent interest in the Moolarben thermal coal mining joint venture, bringing its stake in the coal mine up to 98.75 per cent.
The ASX-listed miner will spend $110.5 million on the purchase, which comes after three of the remaining joint venture participants had agreed to sell the combined stake to a third party. Yancoal was able to exercise a pre-emptive right to acquire the interest on similar terms.
The acquired interest will be held by Moolarben Coal Operations, a wholly owned subsidiary of Yancoal Australia.
The Foreign Investment Review Board has already approved the transaction. There are some other government approvals needed, as well as consents and waivers from third parties.
The purchase price will be payable as a $25 million cash component on completion of the deal, followed by $85.5 million in quarterly instalments over the next five years.
The Moolarben coal complex is part of the western coalfields region of NSW. It has both open-cut and underground mining areas, as well as coal processing and transport facilities on-site.
It is operated by Moolarben Coal Operations on behalf of the joint venture, which features Yancoal as the primary investor alongside a consortium of South Korea-based power companies.
Yancoal Australia has advised that the purchase will be funded from existing cash holdings as well as future operating cash flows. The announcement comes just a few days after the company reported its best half-year operational performance in five years.