Idemitsu Kosan is selling its 85% stake in the Ensham coal mine in Australia to Sungela Pty, a subsidiary of Thungela Resources, for an upfront payment of $240 million. The deal will allow Thungela to diversify away from South Africa where rail and port problems have impacted exports. Thungela will also receive a royalty payment based on the price and volume of coal sold from the Ensham mine in 2023 and 2024. Thungela has plans to diversify away from South Africa due to extended power cuts and the falling of South African coal shipments through its main coal export terminal to the lowest in 29 years. The deal will provide Thungela with access to the Japanese and other Asian markets where demand for coal remains strong and balance the group’s price exposure by providing access to the strong Newcastle export coal price, which is the benchmark for thermal coal in the Asia-Pacific region.
The Ensham coal mine in Australia has been operating for over 25 years and provides employment for approximately 600 people, both local residents and drive-in, drive-out personnel. The mine has both open-cut and underground mining operations, with current production levels of 5.3 million tonnes per annum. The open-cut uses a dragline to remove overburden, while the underground is a bord and pillar operation that produces coal and sends it to the surface stockpile via conveyor belts. The coal is transported to Gladstone Port for shipping and to Gladstone Power Station for domestic electricity generation. Ensham is committed to the environment and local community and is actively seeking to supplement its underground mining operations.
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