{"id":5688,"date":"2024-02-12T01:27:03","date_gmt":"2024-02-12T01:27:03","guid":{"rendered":"https:\/\/economicherald.net\/?p=5688"},"modified":"2024-02-12T01:27:03","modified_gmt":"2024-02-12T01:27:03","slug":"ground-breakers-us15-million-bucks-for-a-world-class-asset-only-in-coal","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=5688","title":{"rendered":"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal"},"content":{"rendered":"

South32 will receive an initial payment of just US$15 million ($23m) for its 50% share in the Eagle Downs met coal project in Queensland\u2019s Bowen Basin
\nIt\u2019s the latest acquisition for $3.3 billion Stanmore, which emerged as one of Australia\u2019s top coal miners after buying BHP\u2019s stake in the Poitrel and South Walker Creek mines two years ago
\nS32 has shifted to battery metals since its spin-out from BHP in 2015<\/p>\n

Stanmore Resources (ASX:SMR)<\/a> may have pulled off a deal to rival its founding success, nabbing 50% of the Eagle Downs coal mine in Queensland\u2019s Bowen Basin from South32 (ASX:S32)<\/a> for an initial US$15 million ($23 million).<\/p>\n

It is also in talks with Aquila, a subsidiary of China\u2019s biggest steelmaker Baowu, to take a further 30% stake via a restructure of the JV, in a bid to bring the operation back to life after pre-production activities were stalled in 2015.<\/p>\n

Since then the market for metallurgical coal has transformed with Chinese steel production reaching new heights and a lack of investment in new supplies helping send benchmark prices to over US$300\/t, with Baowu\u2019s desire to support an investment likely stronger since the removal of restrictions last year on the export of Aussie coal to China.<\/p>\n

Stanmore famously made its first fortune at the Isaac Plains mine in Queensland, paying Vale and Sumitomo just $1 \u2014 that\u2019s right $1 \u2014 to take the asset and its $32m environmental legacy off their hands.<\/p>\n

Later backed by Indonesia\u2019s Widjaja dynasty, Stanmore has emerged as one of the largest sellers of PCI and semi-soft coking coal in the world after buying BHP\u2019s (ASX:BHP)<\/a> Poitrel and South Walker Creek mines in 2022 for up to US$1.35 billion, taking full control later that year after acquiring Japanese trading house Mitsui\u2019s 20% minority holding in a further US$380m deal.<\/p>\n

Eagle Downs is an altogether different proposition because it has yet to be developed. But with a mine life of potentially over 40 years (producing 4-6Mtpa) and its proximity to Stanmore\u2019s existing assets and infrastructure, the project is attractive to Stanmore, which has less than 10 years of mine life remaining at Poitrel.<\/p>\n

\u201cStanmore is uniquely positioned to leverage our existing infrastructure portfolio at Poitrel and Isaac Plains to support an optimised development plan for the project, and utilise our existing rail and port capacity as a key investment enabler,\u201d SMR\u2019s MD Marcelo Matos said. <\/p>\n

\u201cEagle Downs also has strong strategic fit in our portfolio, extending the life of our operations in the area given the relatively shorter mine life at Poitrel and the Isaac Plains Complex. <\/p>\n

\u201cThis is in line with our commitment to developing options for expanding and increasing the longevity of our business in the area by leveraging our strong existing infrastructure position.\u201d<\/p>\n

\u00a0<\/p>\n

South32\u2019s coal transition<\/h2>\n

The sale could net South32 more payments down the line, with its half share of the 1.14Bt deposit \u2014 expected to produce premium low-vol hard coking coal \u2014 also subject to a US$20m payment once the first 100,000t of coal has been mined via longwall mining methods.<\/p>\n

A capped royalty of US$100m will be payable in the future, dependent on coal prices.<\/p>\n

It follows South32\u2019s decision in August last year to dump a controversial US$700 million extension of its Dendrobium mine, part of the Illawarra coal operations in regional New South Wales, where opposition had centred on the impact the mine\u2019s expansion could have on Sydney\u2019s water supply.<\/p>\n

The company, a spin-out of assets BHP wanted to get rid of during the last major mining downturn in 2015 mockingly called CrapCo ahead of its listing, has increasingly focused on battery and energy transition metals in recent years.<\/p>\n

MD Graham Kerr has flagged major spending on the more than US$1.5 billion Taylor zinc deposit in Arizona, where a battery manganese project could also be developed at the nearby Clark deposit. S32 also offered US$1.55 billion in 2021 for 45% of the Sierra Gorda copper mine in Chile, while it is also among the largest alumina, aluminium and manganese producers on the ASX and boasts the Cannington mine in Queensland \u2014 one of biggest silver and lead producers globally.<\/p>\n

Its Eagle Downs project has been up for sale in various forms in recent years, with a new process kicked off by Macquarie Capital last year after BHP announced it would net up to $6.4 billion for the sale of its Daunia and Blackwater met coal mines to Whitehaven Coal (ASX:WHC)<\/a>.<\/p>\n

$14 billion S32 has seen its shares fall 32% over the past year as the fortunes of battery and base metals have been hammered in the past year. S32 also flagged the review of its Cerro Matoso ferronickel mine in Colombia amid a weakening of nickel prices, and because its product tends to eat a big discount to already struggling LME nickel prices.<\/p>\n

$3.3b SMR meanwhile has been stable in the past year and is up over 270% in the past five years, its value hitting an inflection point after sealing its acquisition of BHP\u2019s BMC stake. It is expecting to produce 12.3-13Mt of saleable coal from SWC (5.8-6Mt), Poitrel (3.9-4.1Mt) and Isaac Plains (2.6-2.9Mt) in 2024.<\/p>\n

Both SMR and S32 were down over 1% this morning.<\/p>\n

It came amid a 0.74% fall for the materials sector in early trade, with lower iron ore and base metals prices keeping ASX resources stocks broadly in the red.<\/p>\n

\u00a0<\/p>\n

Ground Breakers share prices today<\/h2>\n\n

<\/span>\u00a0
\n<\/span><\/p>\n

The post Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

South32 will receive an initial payment of just US$15 million ($23m) for its 50% share in the Eagle Downs met coal project in Queensland\u2019s Bowen [more…]<\/a><\/p>\n","protected":false},"author":0,"featured_media":5689,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-5688","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nGround Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal - Economic Herald<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/economicherald.net\/?p=5688\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal - Economic Herald\" \/>\n<meta property=\"og:description\" content=\"South32 will receive an initial payment of just US$15 million ($23m) for its 50% share in the Eagle Downs met coal project in Queensland\u2019s Bowen [more...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/economicherald.net\/?p=5688\" \/>\n<meta property=\"og:site_name\" content=\"Economic Herald\" \/>\n<meta property=\"article:published_time\" content=\"2024-02-12T01:27:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/economicherald.net\/wp-content\/uploads\/2024\/02\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"676\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688\"},\"author\":{\"name\":\"\",\"@id\":\"\"},\"headline\":\"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal\",\"datePublished\":\"2024-02-12T01:27:03+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688\"},\"wordCount\":935,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2024\\\/02\\\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg\",\"articleSection\":[\"Finance\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/economicherald.net\\\/?p=5688#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688\",\"url\":\"https:\\\/\\\/economicherald.net\\\/?p=5688\",\"name\":\"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal - Economic Herald\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2024\\\/02\\\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg\",\"datePublished\":\"2024-02-12T01:27:03+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/economicherald.net\\\/?p=5688\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688#primaryimage\",\"url\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2024\\\/02\\\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg\",\"contentUrl\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2024\\\/02\\\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg\",\"width\":1200,\"height\":676},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=5688#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/economicherald.net\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/#website\",\"url\":\"https:\\\/\\\/economicherald.net\\\/\",\"name\":\"Economic Herald\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/economicherald.net\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/#organization\",\"name\":\"Economic Herald\",\"url\":\"https:\\\/\\\/economicherald.net\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2023\\\/10\\\/cropped-cropped-economicheraldlogo-1.png\",\"contentUrl\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2023\\\/10\\\/cropped-cropped-economicheraldlogo-1.png\",\"width\":850,\"height\":760,\"caption\":\"Economic Herald\"},\"image\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/#\\\/schema\\\/logo\\\/image\\\/\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal - Economic Herald","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/economicherald.net\/?p=5688","og_locale":"en_US","og_type":"article","og_title":"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal - Economic Herald","og_description":"South32 will receive an initial payment of just US$15 million ($23m) for its 50% share in the Eagle Downs met coal project in Queensland\u2019s Bowen [more...]","og_url":"https:\/\/economicherald.net\/?p=5688","og_site_name":"Economic Herald","article_published_time":"2024-02-12T01:27:03+00:00","og_image":[{"width":1200,"height":676,"url":"https:\/\/economicherald.net\/wp-content\/uploads\/2024\/02\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/economicherald.net\/?p=5688#article","isPartOf":{"@id":"https:\/\/economicherald.net\/?p=5688"},"author":{"name":"","@id":""},"headline":"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal","datePublished":"2024-02-12T01:27:03+00:00","mainEntityOfPage":{"@id":"https:\/\/economicherald.net\/?p=5688"},"wordCount":935,"commentCount":0,"publisher":{"@id":"https:\/\/economicherald.net\/#organization"},"image":{"@id":"https:\/\/economicherald.net\/?p=5688#primaryimage"},"thumbnailUrl":"https:\/\/economicherald.net\/wp-content\/uploads\/2024\/02\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg","articleSection":["Finance"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/economicherald.net\/?p=5688#respond"]}]},{"@type":"WebPage","@id":"https:\/\/economicherald.net\/?p=5688","url":"https:\/\/economicherald.net\/?p=5688","name":"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal - Economic Herald","isPartOf":{"@id":"https:\/\/economicherald.net\/#website"},"primaryImageOfPage":{"@id":"https:\/\/economicherald.net\/?p=5688#primaryimage"},"image":{"@id":"https:\/\/economicherald.net\/?p=5688#primaryimage"},"thumbnailUrl":"https:\/\/economicherald.net\/wp-content\/uploads\/2024\/02\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg","datePublished":"2024-02-12T01:27:03+00:00","breadcrumb":{"@id":"https:\/\/economicherald.net\/?p=5688#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/economicherald.net\/?p=5688"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/economicherald.net\/?p=5688#primaryimage","url":"https:\/\/economicherald.net\/wp-content\/uploads\/2024\/02\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg","contentUrl":"https:\/\/economicherald.net\/wp-content\/uploads\/2024\/02\/GettyImages-482172307-e1707697919716-YZ7i7q.jpeg","width":1200,"height":676},{"@type":"BreadcrumbList","@id":"https:\/\/economicherald.net\/?p=5688#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/economicherald.net\/"},{"@type":"ListItem","position":2,"name":"Ground Breakers: US15 million bucks for a \u2018world class\u2019 asset? Only in coal"}]},{"@type":"WebSite","@id":"https:\/\/economicherald.net\/#website","url":"https:\/\/economicherald.net\/","name":"Economic Herald","description":"","publisher":{"@id":"https:\/\/economicherald.net\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/economicherald.net\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/economicherald.net\/#organization","name":"Economic Herald","url":"https:\/\/economicherald.net\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/economicherald.net\/#\/schema\/logo\/image\/","url":"https:\/\/economicherald.net\/wp-content\/uploads\/2023\/10\/cropped-cropped-economicheraldlogo-1.png","contentUrl":"https:\/\/economicherald.net\/wp-content\/uploads\/2023\/10\/cropped-cropped-economicheraldlogo-1.png","width":850,"height":760,"caption":"Economic Herald"},"image":{"@id":"https:\/\/economicherald.net\/#\/schema\/logo\/image\/"}}]}},"_links":{"self":[{"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/posts\/5688","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/economicherald.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5688"}],"version-history":[{"count":0,"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/posts\/5688\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/media\/5689"}],"wp:attachment":[{"href":"https:\/\/economicherald.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/economicherald.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/economicherald.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}