Corrs Chambers Westgarth has advised MACH Energy Australia Pty Ltd in relation to its recently announced agreement to acquire Rio Tinto’s Mount Pleasant thermal coal project in New South Wales.
Mount Pleasant is a large-scale thermal coal asset in the Hunter Valley region of New South Wales with total marketable reserves of 474 million tonnes.
Under the binding agreement, MACH will acquire Mount Pleasant for US$224 million (A$320 million) plus royalties. The purchase price includes a completion payment of US$83 million, two unconditional deferred payments of US$58 million and a conditional payment of US$25 million. The royalty component is payable quarterly at two per cent of Gross FOB Revenue for coal sold from the first 625 million tonnes of Run of Mine coal (equivalent to 474 million tonnes of marketable reserves) when prices exceed US$72.50/tonne.
MACH Director and Droxford Mining Group General Counsel Terry Bourke said, “The level of professionalism, commitment and depth of expertise of the Corrs team was outstanding. The documentation of the transaction was complex. The path and extended duration of the negotiations necessitated considerable agility and dedication by the lawyers involved, including during the Christmas / New Year period. The service which we received was certainly impressive.”
Completion of the transaction is expected by the second quarter of 2016 and is subject to certain conditions precedent being met, including completion of a restructure of Coal & Allied and regulatory approvals.
The Corrs team was led by partner Bruce Adkins and supported by Special Counsel Stuart Clague and Lawyer Ben Pattison. Partner Christine Covington led the Corrs team advising on the environment, water and property aspects of the transaction.
Corrs partner Bruce Adkins said, “This is a significant transaction and represents a vote of confidence in the Australian coal sector. The Corrs team is delighted to have worked with MACH in making this transaction a reality.”
Rio Tinto was represented by Allens Linklaters.
The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.