Whitehaven Coal Earnings: Sale of 30% Stake in Blackwater Mine Eliminates Balance-Sheet Concerns

The highlight of no-moat Whitehaven Coal’s fiscal 2024 result is the sale of a 30% stake in its Blackwater metallurgical coal mine for about USD 1.1 billion—AUD 1.6 billion—to two Japanese steelmakers. It values Blackwater at USD 3.6 billion (100% basis) compared with the total of up to USD 4.1 billion that Whitehaven has agreed to pay no-moat BHP for Blackwater and the smaller Daunia mine. This includes up to USD 900 million in contingent consideration, most of which is likely to be paid to BHP based on our assumed near-term metallurgical coal prices. Blackwater accounts for roughly three quarters of sales from the two mines over our forecast period and has three times the mine life of Daunia, so we think this is a fair price.