Tag Archives: M Resources

South32 sells Illawarra Metallurgical Coal to entity owned by GEAR and M Resources

Coal technology, Mining mergers and acquisitions, Steel and iron ore, , , , , , ,

South32 has entered into a binding agreement to sell Illawarra Metallurgical Coal to an entity owned by Golden Energy and Resources Pte Ltd (GEAR) and M Resources Pty Ltd for upfront and deferred cash consideration of $1.3 billion plus contingent price-linked consideration of up to $350 million.

The sale is expected to complete in the first half of South32’s 2025 financial year, subject to the satisfaction of certain conditions.

“This transaction will realise significant value for our shareholders and is consistent with our strategy to reshape our portfolio toward commodities critical in the transition to a low-carbon future,” Graham Kerr, South32 Chief Executive Officer, said. “It will streamline our portfolio, strengthen our balance sheet and unlock capital to invest in our high-quality development projects in copper and zinc. The transaction will also simplify our business and reduce our capital intensity.”

Illawarra Metallurgical Coal produces high-quality metallurgical coal, a key ingredient in the in the production of steel, which will be required in the steelmaking process until low-carbon steel becomes economically viable on a commercial scale.

Illawarra Metallurgical Coal has underground mines at Appin and Dendrobium, which produce premium-quality, hard coking coal for steelmaking. In South32’s 2023 financial year, it produced almost 5.5 Mt of this product.

GEAR and M Resources are established participants in the Australian metallurgical coal industry, with a strong commitment to environmental and safety standards, who are well positioned to continue Illawarra Metallurgical Coal’s contribution to the local steel industry and the Illawarra and Macarthur regions, according to South32.

“Our focus remains the safe and reliable operation of Illawarra Metallurgical Coal,” Kerr said. “Over the coming months we will work with the buyer, our workforce, the local community, government, customers and suppliers to support a successful transition of ownership.”

Komatsu to help PIMS Group with Millennium and Mavis Downs underground transition

Coal technology, Mineral project development, Mining equipment, Mining services, Steel and iron ore, , , , , , , , , , , , , ,

A new agreement between Komatsu and PIMS Group, a north Queensland-based mining services operator, could help set a benchmark for extending the life of multiple Queensland coal mines, the pair say.

PIMS Group was recently awarded a five-year contract to convert the idled open-pit Millennium and Mavis Downs coal mines, west of Mackay, Queensland, to underground operations, which could ultimately result in an estimated 1.2 Mt/y of incremental coal extraction. Komatsu will sell PIMS Group new mining equipment for the project, and will provide a comprehensive maintenance, parts, rebuild and engineering support service to ensure the companies’ joint objectives are effectively supported, it said.

Komatsu will provide a full-time preventative maintenance team at the mine sites to help maximise the operation of the eight pieces of equipment now on order, including two 12CM27 continuous miners, four 10SC32 shuttle cars, one feeder breaker and one multibolter. Delivery of the Komatsu machines is due in mid-2022 to coincide with PIMS Group’s conversion of the Mavis Downs site to underground operation, which will be followed soon after by conversion of the Millennium site.

Millennium and Mavis Downs are owned by MetRes, a 50:50 joint venture between Stanmore Resources and M Resources. M Mining, a subsidiary of M Resources, is the joint venture manager and operator.

Rob Rogers, Vice President of Underground Soft Rock for Komatsu in Australasia, said the success of the three-way venture with PIMS Group and MetRes depended on total confidence of each partner to reliably deliver in its area of expertise. Rogers said the arrangement aligns well with Komatsu’s focus on ‘creating value together’, an initiative intended to secure long-term customer solutions, particularly to the benefit of society and communities.

The MetRes rejuvenation alone has the potential to create up to 100 mine construction jobs and result in more than 125 direct full-time mining jobs, according to the companies.

MetRes Chairperson, Matt Latimore, says a partnership and risk-sharing approach, together with the potential for substantial local employment opportunities, had been paramount in PIMS Group winning its bid to operate the infrastructure of both mines.

MetRes has initially worked to reopen the mines using auger and open-pit methods, with production of first coal already achieved in September 2021. According to MetRes, underground expansion will be economically achieved through the mines’ existing highwalls, yielding low-ash, high-quality metallurgical coal used in the production of steel globally.

Rehabilitation of the open-pit sites will coincide with the switch to underground operations. With underground activity, Millennium and Mavis Downs share a current predicted additional mine life of 12 years, producing 13.9 Mt of metallurgical coal.

PIMS’ contract with the mines’ owners is the largest undertaken by the north Queensland group.