PERTH (miningweekly.com) – Coal miner Bowen Coking Coal has announced plans to divest of its Broadmeadow East mine, in Queensland, to the Burton-Lenton joint venture (BLJV), in which the company holds a 90% interest.

Bowen will sell a 10% interest in the Broadmeadow East mine to JV partner MPC Lenton, and a 90% interest to its own subsidiary New Lenton Coal.

In return for its 10% interest, MPC Lenton will pay A$13-million in cash on completion of the sale, as well as an acquisition royalty of A$2.10 for each run-of-mine (RoM) tonne of MPC’s 10% share of production from the mine, on a quarterly basis, from May 2023 to December 2026, provided that the defined weighted average coal price index exceeded a threshold.

MPC will also pay A$20-million into the BLJV account for its future contributions. Once this A$20-million has been exhausted by the BLJV expenditure, New Lenton Coal will be solely responsible for the next A$180-million of expenditure, after which the JV expenditure will be funded in accordance with the participating interest.

If underground mining is conducted in future at Broadmeadow East, MPC will pay New Lenton Coal an underground royalty of A$5 per RoM tonne, on a quarterly basis for its share of production, providing that its share of the revenue is at least A$5/t in that quarter.

“Broadmeadow East mine is representative of what Bowen is all about; a strategy-driven coal company realising the full potential of coal projects by leveraging our considerable commercial and operational capabilities to create value for all stakeholders,” said Bowen Coking Coal CEO Mark Ruston.

“Broadmeadow was an undeveloped asset acquired from Peabody in 2021 for A$1-million plus royalties and brought into production in quick-time in 2022 to make the most of bullish markets. Production to date has eclipsed one-million RoM tonnes and we are currently operating at an annualised rate of in excess of 1.5-million tonnes a year.”

“Streamlining of the ownership structure will allow the business a degree of optionality when blending coal to produce targeted coal quality outputs for specific markets, and reduce operational complexity associated with processing coal mined from the Burton and Broadmeadow East pits,” he said.