BHP Group Limited

Exchange release                                                 

2 April 2024

BHP and Mitsubishi Development Pty Ltd (MDP) have completed the divestment of the Blackwater and Daunia mines to Whitehaven Coal. 

Daunia and Blackwater were part of the BHP Mitsubishi Alliance (BMA) metallurgical coal joint venture in Queensland. Each of BHP and MDP hold a 50% interest in BMA.

Whitehaven Coal has paid BMA US$2.0 billion cash consideration on completion plus a preliminary completion adjustment of US$44.1 million for working capital and other agreed adjustments (100% interest basis). Whitehaven Coal paid a US$100 million deposit on signing of the Asset Sale Agreement on 18 October 2023.

US$1.1 billion cash remains payable by Whitehaven Coal to BMA over 3 years after completion and a potential additional amount of up to US$900 million in a price-linked earnout may also be payable by Whitehaven Coal to BMA over 3 years (100% interest basis). The price-linked earnout is subject to a cap of US$350 million each year and depends on average realised pricing exceeding agreed thresholds for each of the 3 years following completion on 2 April 2024¹.

The total cash consideration for the transaction will be up to US$4.1 billion plus the final completion adjustment amount.

¹ Contingent payments based on 35% revenue share to BMA, subject to average realised prices achieved by the Assets exceeding thresholds of US$159/tonne in the 12 month period 12 months post completion, US$134/tonne in the 12 month period 24 months post-completion and US$134/tonne in the 12 month period 36 months post completion.

Authorised for release by Stefanie Wilkinson, Group Company Secretary.