Australia-based mining and metals company South32 Limited has announced that it has signed a conditional agreement with Australia-based Aquila Resources Pty Ltd (Aquila), a subsidiary of China-based steel producer China BaoWu Steel Group, to acquire a 50 percent interest in, and assume operatorship of, the Eagle Downs metallurgical coal project in Queensland’s Bowen Basin. The other 50 percent interest in the project will continue to be held by Aquila.
The consideration payable by South32 comprises an upfront payment of approximately US$106 million upon completion of the acquisition (excluding transaction costs) and a deferred payment of US$27 million due three years after completion. The acquisition, which will be funded from the group’s cash reserves, is subject to conditions precedent and is expected to close in the first half of the financial year 2019.