A China-linked group is buying a majority stake in Australia’s largest underground coal mine in a deal worth US$2.4 billion ($3.4 billion) to boost its portfolio.
The stock exchange-listed Yancoal Australia, majority owned by China’s Yankuang Energy Group, will pay US$1.85 billion ($2.6 billion) upfront for an 80 percent stake in the Kestrel coking coal mine northeast of Emerald in central Queensland.
Yancoal will also make up to US$550 million ($771 million) over the next five years in contingent payments depending on whether coking coal prices rise by about US$225 a tonne.
Yancoal is buying the stake from Hong Kong-based private equity manager EMR Capital and Indonesian coal company Adaro Group, which had bought it from Rio Tinto for US$2.25 billion ($2.9 billion) in 2018.
Japan’s Mitsui is retaining its 20 percent stake in the operation.
Yancoal Chief Executive Sharif Burra said the acquisition was a “strong strategic fit for Yancoal,” which has two other coal mines in the area—its Middlemount joint venture and the Yarrabee mine.
“Kestrel delivers increased scale and diversification to Yancoal’s portfolio and is expected to contribute premium metallurgical coal into our product mix,” he said.
Kestrel produced 5.9 million tonnes of coal in 2025 and is expected to be in production for another 25 years.
Mining began at Kestrel in 1992, when it was known as the Gordonstone mine.
Yancoal shares were down 3.7 per cent to $6.96 around midday on April 15.
