Wesfarmers is selling its 40% interest in the Bengalla Hunter Valley coal mine to joint venture partner New Hope Corporation for $860 million.
The company expects to report a pre-tax profit on sale of $670 million to $680 million.
Bengalla is currently owned 40% by Wesfarmers, 40% by New Hope, 10% by Taipower and 10% by Mitsui.
Thermal coal from the open cut mine south west of Muswellbrook is mainly exported to Japan and North Asia for power generation.
Wesfarmers Managing Director Rob Scott says the Bengalla sale finalises a review of the resources businesses and follows the completion of the sale of the Curragh coal mine to Coronado Coal in March this year.
“We believe this agreement with New Hope is in the best interests of our shareholders and ensures a smooth transition in the ownership structure of the Bengalla joint venture,” he says.
“Bengalla has made strong returns for Wesfarmers shareholders since our initial interest was acquired in 1991 and it is pleasing the extensive, disciplined and patient review of our coal businesses has resulted in outcomes which reflect the value of these world-class assets.”
Wesfarmers is also spinning off its Coles supermarket division as a separate ASX-listed company.
The move would create a new top 30 company listed on the ASX, holding about 34% of Wesfarmers’ earnings, with about $39.2 billion in revenue and EBIT (earnings before interest and tax) of $1.6 billion.
In June Wesfarmers sold Homebase UK at a loss of up to $400 million.
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