Glencore has entered into an agreement to sell one of its largest coking coal mines in Australia to GFG Alliance.
The acquisition comes at a time where CFG Alliance, an international group of businesses with a focus on industrial, natural and financial resources, looks to cement its position as an integrated steel business in Australia.
GFG Alliance, owned by the British Gupta Family, recently purchased the Wyhalla steel works in southern Australia.
GFG signed a binding agreement with Glencore to buy the company’s Tahmoor underground mining operation in New South Wales. The Tahmoor operation, located just south of Sydney, produces around 2 million tonnes of coal a year. The mine could provide GFG with as much as $500million.
The Tahmoor mine is an important supplier of coking coal to the Whyalla Steelworks.
Commenting on the acquisition, Sanjeev Gupta, Executive Chairman of GFG Alliance said: “The acquisition of the Tahmoor mine is an exciting step forward in our stated strategy to create fully-integrated, end-to-end businesses in Australia, from raw materials and energy right through to high-value finished products ready for market. I very much look forward to welcoming the Tahmoor mine employees and surrounding community into our GFG family.”
“Through this purchase we secure and de-risk an important feed for the Whyalla Steelworks. This, together with our iron ore mines in South Australia, now makes GFG the only fully-integrated Australian steel producer, whether from iron ore and coking coal to primary steel, or from scrap metal and renewable energy to GREENSTEEL.”
Jay Hambro, GFG Alliance’s Chief Investment Officer and CEO SIMEC Mining added: “We believe Tahmoor is a high-value asset with an operation that has been well run and maintained by Glencore. Tahmoor coking coal is well known and regarded in the domestic and international markets for its grade and quality.
“The Tahmoor operation is another good fit within SIMEC’s global portfolio allowing vertical integration for the Whyalla Steelworks and flows to the broader GFG international network.”
Completion of the transaction is subject to customary conditions and is expected to occur in the first quarter of 2018.