Bowen Coking Coal, a coal mining company, has unveiled its plan to sell its Broadmeadow East mine in Queensland to the Burton-Lenton joint venture (BLJV), in which it holds a 90% stake.

Under the agreement, Bowen will divest a 10% interest in the Broadmeadow East mine to its JV partner MPC Lenton, while transferring the remaining 90% interest to its subsidiary, New Lenton Coal.

As part of the deal, MPC Lenton will pay A$13 million in cash upon completion of the sale for its 10% interest, as well as an acquisition royalty of A$2.10 per run-of-mine (RoM) tonne of MPC's share of production from the mine on a quarterly basis from May 2023 to December 2026. This is contingent upon the weighted average coal price index meeting a specified threshold.

Additionally, MPC will contribute A$20 million to the BLJV account for future expenses. Once this amount is depleted, New Lenton Coal will assume full responsibility for the next A$180 million of expenditure. Afterward, joint venture expenditure will be funded based on participating interest.

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

Mark Ruston, CEO of Bowen Coking Coal, expressed his enthusiasm for the transaction, highlighting Broadmeadow East's significance and the company's strategy of leveraging its capabilities to create value for stakeholders. He also emphasized the operational benefits and flexibility that will result from streamlining the ownership structure and optimizing coal blending for specific markets.

Since its acquisition from Peabody in 2021, the Broadmeadow East mine has been swiftly brought into production, surpassing one million RoM tonnes to date and operating at an annualized rate exceeding 1.5 million tonnes.