Whitehaven Coal Ltd

WHC: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$6.70	Rmkk	Rfpcprp

Whitehaven Coal: Purchase of BHP and Mitsubishi’s Metallurgical Coal Mines a Good Deal

Jon Mills

Oct 20, 2023

No-moat Whitehaven Coal has agreed to buy the Daunia and Blackwater metallurgical coal mines from BHP and Mitsubishi for at least USD 3.2 billion (AUD 5 billion), one third of which is vendor-financed. Up to USD 900 million (AUD 1.4 billion) additional funding is payable if metallurgical coal prices stay elevated for three years after the closure of the deal, likely in the June 2024 quarter. BHP will retain exposure to the profit and cash flow from these mines until the deal closes.

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