Rival bidders are about to become partners, with Swiss miner Glencore striking a deal with Yancoal to acquire a 49 per cent interest in the Hunter Valley Operations coal mine, north-west of Singleton.
After losing its bid to buy Rio Tinto's Coal and Allied assets to Yancoal, Glencore has now signed agreements with the Chinese miner to form a joint venture to run the mine.
Glencore will pay US$1.139 billion, plus a share of the royalties payable by Yancoal to Rio Tinto.
The addition brings Glencore's coal production capacity in the Hunter Valley to 69 million tonnes per annum.
The 49 per cent interest is made up of a 16.6 per cent stake that Glencore will acquire directly from Yancoal, while the two companies will work together to buy Mitsubishi Development's 32.4 per cent stake.
Companies will share roles
The joint venture committee will be comprised of three representatives from each company, with an independent management team to run the mine's day-to-day operations.
Glencore said it would nominate the candidates for the site's general manager, while Yancoal would nominate candidates for the financial controller position.
Glencore also said it would be the exclusive marketing agent for coal sales in Japan, South Korea and all other countries excluding China, Taiwan (other than for specified customers), Thailand and Malaysia.
The transaction is expected to take six months, pending regulatory approval.
