Japan's Idemitsu Kosan to sell Australia coal mine to Thungela for $240 mln
TOKYO, Feb 3 (Reuters) - Japan's Idemitsu Kosan Co (5019.T) has agreed to sell its 85% stake in the Ensham coal mine in Australia to a Thungela Resources (TGAJ.J) subsidiary, Sungela Pty, for an upfront payment of A$340 million ($240 million), it said on Friday.
The deal helps South African coal miner Thungela to diversify away from its home country, where rail and port problems have dented exports to overseas markets.
Idemitsu Kosan, Japan's second-biggest oil refiner, will also receive a royalty payment based on the price and volume of coal to be sold from Ensham in 2023 and 2024, it said in a statement.
Sungela is 75% owned by Thungela, with 12.5% stakes held by Mayfair Corporations Group and Audley Energy.
Despite a global shift away from the polluting fossil fuel, demand surged last year after Russia's invasion of Ukraine caused a scramble for alternatives to Russian coal and gas.
"This will provide Thungela with access to the Japanese and other Asian markets, where demand remains strong, and better balance the group's price exposure by providing access to the strong Newcastle export coal price," Thungela said.
The Newcastle price is the benchmark for thermal coal in the Asia-Pacific region.
Last year South African coal shipments through its main coal export terminal fell to their lowest in 29 years owing to a shortage of trains for haulage to port.
Thungela has previously flagged plans to diversify away from South Africa, where extended power cuts are also hampering mining operations.
Idemitsu last year said it planned to divest the Ensham stake and that the company's annual coal production would fall to 5.7 million tonnes in the financial year from April 2023, from 9.17 million tonnes this year.
It plans to close its Muswellbrook coal mine in Australia by the end of March, leaving Boggabri as the only mine in its coal portfolio as it gradually shifts to cleaner fuels.
($1 = 1.4158 Australian dollars)
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