“This transaction is consistent with BHP’s strategy,” Edgar Basto, head of BHP’s Minerals Australia business, said in a statement. “As the world decarbonizes, BHP is sharpening its focus on producing higher quality metallurgical coal sought after by global steelmakers to help increase efficiency and lower emissions.” The global miner will retain exposure to steelmaking coal through its BHP-Mitsubishi Alliance venture, which is Australia’s top producer.
BHP in August announced a deal to sell its oil and gas operations to Woodside Petroleum Ltd. in exchange for shares that it will distribute to its own investors. The company said Monday it was continuing the review process for its New South Wales thermal coal operation and remained open to all options.
The sale was criticized by shareholder activist group, the Australasian Centre for Corporate Responsibility.
“Rather than make the hard decisions to wind these assets down, BHP is running for the door,” Dan Gocher, director of climate and environment at the group, said in a statement. “Along with the proposed BHP petroleum merger with Woodside, these are not the actions of a climate leader. BHP should retain these assets and decline production in keeping with a 1.5°C pathway.”
Brisbane-based Stanmore, which produced around 2.6 million tons of metallurgical coal in fiscal 2021, operates the Isaac Plains complex, also in Queensland, and has environmental approval to develop the adjacent Isaac Downs project.
Completion of the BMC deal, which requires sign off from Australia’s Foreign Investment Review Board, is expected around the middle of 2022. BHP shares rose as much as 1.8% in Sydney following the announcement, while Stanmore jumped up to 24%, its highest in more than two years.