BHP Group hires JP Morgan to sell Australian thermal coal mine

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The world’s largest mining company BHP Group has hired U.S. investment bank JP Morgan to sell its Australian thermal coal mine, following pressure from investors concerned about global warming, two sources said.

Increased scrutiny from investors, regulators and climate change activists is prompting miners to limit their exposure to fossil fuels.

BHP’s Mt Arthur open cut mine, in the Hunter Valley region of New South Wales, supplies thermal coal, used as fuel for power plants, to domestic and international customers and could fetch between $1.5 billion and $1.8 billion, banking sources said on condition of anonymity.

Thermal coal only accounts for 3% of the portfolio of BHP, which has been asked by green groups and some shareholders to leave any industry associations with policies that fail to match the company’s support for the 2015 Paris climate accord.

Its activist investor Elliott, which holds a 4.7% stake in the mining company, has pushed for the sale of the thermal coal assets, which also include one third of the Cerrejon mine in Colombia.

BHP and JP Morgan declined to comment.

Rival mining companies have also taken steps to go thermal coal free, with Rio Tinto selling its last coal mines in 2018, and Anglo American considering the spinoff or sale of its South African coal operations within the next two or three years.

There is only a handful of companies including Australia’s Whitehaven Coal Ltd and India’s Adani Enterprises likely to express interest in the Mt Arthur mine, the sources said.

Sales processes have slowed over the past few months, as government lockdowns to contain the novel coronavirus halted mine visits and due diligence.

But as lockdown measures are gradually lifted, banking sources expect activity to resume in the coming months, with BHP’s sale of Mt Arthur possible by the end of the year.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.