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BHP moves ahead with coal exit plan

Resources giant BHP is understood to have hired UBS to work on the $7bn sale or demerger of its coal mines.

BHP is moving ahead with its plan to exit coal. Picture: Supplied.
BHP is moving ahead with its plan to exit coal. Picture: Supplied.

It comes after the group also called on the services of Goldman Sachs for the plan, as revealed by DataRoom last week.

BHP confirmed at its results on August 18 that it would sell its Mount Arthur thermal coal mine operation in NSW, the stake in its Cerrejon thermal coal mine in Columbia and two metallurgical coal mines in Queensland held as part of an alliance agreement with Mitsui Coal.

Analysts at stockbroking firm Shaw and Partners put the collective value of the portfolio at a about $7bn, with Mt Arthur worth $3.224bn, Cerrejon $656m and the two Bowen Basin Queensland mines – South Walker Creek and Poitrel - at $3.185bn.

UBS has gained the BHP mandate as it also works for energy giant Chevron selling its 16.67 per cent interest in the North West shelf project off the coast of Western Australia, with the stake estimated to be worth about $5.8bn.

It remains unclear whether UBS’s role with BHP involves working on the demerger plan with Goldman Sachs or if it is only mandated on for a trade sale of the $3.2bn Queensland mines.

The understanding is that BHP will package up the metallurgical coal mines with the thermal coal mines and demerge the business if a trade buyer cannot be found for the assets first.

Read the full article in The Australian, 25th August 2020

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