Peabody Sells Millennium & Mavis Downs Coal Mine to MetRes
The MetRes joint venture between Stanmore Coal and M Resources has agreed to acquire the Millennium and Mavis Downs coal mines in Australia from Peabody Energy. The JV signed an agreement to purchase the mines, which are currently in care and maintenance, for an upfront cash consideration of nearly AUD 1.25 million and a royalty agreement, which is capped at AUD 1.25 million. MetRes will also undertake rehabilitation obligations with an investment of around AUD 25.7 million. The incurred rehabilitation costs of AUD 12.5 million will be reimbursed by Peabody over a two-year period. With a peak production of up to one million tonnes a year, the mine is slated to restart operations from July and expected to create between 150 and 200 jobs.
The scope of the deal includes the acquisition of 0.5 million tonne per annum of long-term rail and port capacity and 349 million litres of long-term raw water supply allocation to support a mining restart. It also will also acquire all associated contractual rights and obligations.
Australian law firm Johnson Winter & Slattery has advised Peabody on its sale. The Johnson Winter & Slattery team was led by Energy & Resources Partners Bruce Adkins and Stuart Clague assisted by Senior Associate Jarrod Wilksch and Associate Haerim Nam. Finance Partner Craig Wappett also assisted on the royalty arrangements.