Australia’s Whitehaven Coal on Thursday announced the sale of a 30% stake in the Blackwater metallurgical coal mine, near Emerald in Queensland, for $1.08-billion in cash.

The ASX-listed company entered into separate binding agreements with Japanese steelmakers Nippon Steel and JFE Steel for the sale of 20% and 10%, respectively, in Blackwater.

On completion of both transactions, Blackwater will be owned by Whitehaven, Nippon Steel and JFE Steel through an unincorporated joint venture (JV), which Whitehaven will manage.

Blackwater produces 12-million to 13-million tonnes a year of run-of-mine coal. It is one of the biggest mines in Australia, with a strike length of 80 km.

Nippon Steel and JFE Steel are long-term consumers of metallurgical coal from the Blackwater mine. As part of the JV arrangements, Whitehaven has entered into separate offtake agreements with Nippon Steel and JFE Steel, which consider their equity interests and historical consumption of Blackwater products. The offtake agreements include market-based pricing mechanisms.

“As long-term customers of Blackwater, their co-investment reflects the importance of Blackwater metallurgical coal in the seaborne market. The formation of this joint venture with such high-quality participants validates the asset purchase by Whitehaven, the coal quality and Whitehaven’s plans as the operator of Blackwater,” said CEO and MD Paul Flynn.

He stated that the proceeds from the sell-down would strengthen Whitehaven’s balance sheet.

Meanwhile, reporting on Whitehaven's full-year results for the year ended June 2024, Flynn said that the year was a transformational one for the company through the acquisition of the Daunia and Blackwater mines.

The company posted underlying earnings before interest, taxes, depreciation and amortisation (underlying Ebitda) for the year ended June 2024 of A$1.4-billion including a June-quarter Ebitda contribution of A$272-million from Daunia and Blackwater mines.

Whitehaven delivered underlying net profit after tax of A$740-million for the 2024 financial year.

A fully franked final dividend of 13c a share will be paid on September 17, taking the full-year dividend to 20c a share, fully franked.