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South32 (OTCPK:SOUHY) said Monday it secured approval from the Australian Foreign Investment Review Board for the sale of its Illawarra metallurgical coal assets to an entity owned by Golden Energy and Resources and coal trader M Resources.
The $1.65B deal announced in February – comprised of a $1.05B upfront cash payment and an additional $250M deferred until 2030, plus a $350M contingent payment linked to future coal prices – is a significant move for South32 (OTCPK:SOUHY) aimed at streamlining its portfolio and focusing growth on other sectors.
The deal will “streamline our portfolio, strengthen our balance sheet and unlock capital to invest in our high-quality development projects in copper and zinc,” South32 (OTCPK:SOUHY) CEO Graham Kerr said at the time.
The Illawarra operations are located in the Illawarra and Macarthur regions of the southern coalfields of Australia’s New South Wales.