South32 (S32) has agreed to buy a 50 per cent stake in Queensland’s Eagle Downs coking coal project from Aquila Resources, a subsidiary of China BaoWu Steel Group, for an upfront payment of $106m (£79.8m), together with a deferred payment of $27m due three years after completion.
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The convoluted deal relies on BaoWu buying Brazilian miner Vale's 50 per cent stake in the mine then on-selling the stake to South32. On completion, the BHP spin-off will take on operating responsibilities – probably not as straightforward as you might think, given that the project was placed under care and maintenance in 2015 after coal prices tanked and problems emerged with a key contractor.