advised Batchfire Resources (Batchfire) on the acquisition of the Callide Coal Mine (Callide) from Anglo American.
Terms of the deal, which was reportedly agreed upon at the start of the year, remain confidential.
This complex transaction brought together the vast coal mining experience of the Batchfire management team, with the private equity funding and coal brokerage expertise of Avra Commodities Pte Ltd (Avra), to achieve a successful transaction and the revision of coal supply agreements with neighbouring Callide B and Callide C Power Stations.
Batchfire will also continue to supply Queensland Alumina Limited under a long term supply arrangement.
The DLA Piper team was led by Brisbane Corporate partner Lyndon Masters and senior associate Alexander Samson.
“Batchfire's acquisition of the Callide mine reflects the current status of M&A activity in the Australian coal sector, whereby smaller privately funded companies are seeking to acquire unique coal assets from the traditional major mining houses, where they see significant growth potential from the asset (that the traditional mining houses may not be in a position to realise),” says Masters .
“The continuation of the existing domestic supply arrangements for Callide coal, coupled with coal export opportunities presented by Avra's coal brokerage network, means that Batchfire is very well placed to substantially increase value for its shareholders in the short and long term. We are delighted to have worked with Batchfire to deliver a successful transaction.”
Callide has been in operation since 1945, and has produced over 232 million tonnes (Mt) of coal. The mine delivers approximately 5.5Mtpa of coal to the adjacent Callide Power Stations, which generate up to approximately 18% of Queensland’s electricity.
Callide will continue to operate uninterrupted throughout the acquisition process.