BHP Billiton Ltd., the world’s largest mining company, is looking to sell its Gregory steelmaking coal mine in Australia’s Queensland state, after last year closing one part of the operation due to low prices.
“In addition to divestment, the company is assessing options for the Gregory Crinum complex to further extend the operation’s life,” the Melbourne-based company said today in an e-mailed statement. “BHP Billiton metallurgical coal will continue to review its portfolio of assets to ensure alignment with the company’s strategy.”
Gregory Crinum has a remaining mine life of four years, BHP said in its fiscal 2012 annual report, with a measured coal resource of 8.3 million metric tons. BHP’s share of output in the joint-venture operation was 1.4 million tons in the year to June 30. A sale is likely to fetch A$800 million ($824 million) with UBS AG running the sales process, the Australian Financial Review said today in its Street Talk column, without citing anyone.
BHP in October last year closed the open-cut cut operation at the mine after it became unprofitable because of falling coal prices. The underground mine remains operational. BHP has signaled it will sell assets that no longer deliver profits or fit with the company’s strategy.
BHP has cut spending on operations that have become “non-core,” including nickel and aluminum assets after the profitability of those assets fell, Chief Executive Officer Marius Kloppers said in August.
The review will take about six to nine months and will depend on market interest and other commercial factors, BHP said. Gregory first produced coal in 1979 and is operated in a 50-50 joint venture with Mitsubishi Corp.