Mining giant BHP would pay a bidder about $275 million to take the biggest coal mine in NSW off its hands even as prices of the fossil fuel soar to levels not seen since 2008.
BHP has been shopping its Mt Arthur coal mine near Muswellbrook for more than a year, and on Wednesday slashed its value from about $550 million to a liability of $275 million.
The reduction, coming seven months after it dropped $1.6 billion off the book value of the mine, is also an indication of the huge costs of rehabilitation the new owner will have to bear, analysts said. These include $40 million owed to Muswellbrook Shire Council for a road that BHP dug up, a council official said.
“It did surprise us – we did have a positive value on Mt Arthur,” Rory Simington, from energy analysts Wood Mackenzie, said. “It represents BHP’s view of the thermal coal market and the difficulty of the sales process.”