Glencore has agreed to sell one of two Australian coal mines it put up for sale last year to British industrialist Sanjeev Gupta’s GFG Alliance for an undisclosed sum, the two companies said separately on Tuesday.
The acquisition follows Gupta’s purchase last year of the financially troubled Wyhalla steel works in southern Australia, part of a plan to build an integrated steel business by buying the unwanted assets of other companies.
The companies did not give the sale prices, but several sources familar with the sales process had told Reuters the mine was likely to fetch around $100 million.
Tahmoor produces about 2 million tonnes of coal a year, mostly high-quality coking coal used for steel making internationally and in Australia, including at the Whyalla facility, GFG executive chairman Gupta said in a statement.
“The acquisition of the Tahmoor mine is an exciting step forward in our stated strategy to create fully-integrated, end-to-end businesses in Australia, from raw materials and energy right through to high-value finished products ready for market,” he said.
The transaction is expected to be completed in the first quarter of 2018 pending foreign investment approval in Australia, a Glencore spokesman said.
Glencore put the Rolleston and Tahmoor mines up for sale last year as the mining and trading house looks to consolidate its coal activities around its Australian Hunter Valley mines producing thermal coal, used for power production.
GFG Alliance, a $10 billion metals, industrials and energy group, has been snapping up distressed industrial assets in Britain, Australia and the United States in the past few years.
The company runs metals group Liberty House and energy and commodities group SIMEC, with assets spanning steelmaking, aluminium smelting, engineering, renewable and non-renewable energy, commodities trading, shipping, property and finance.