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Contract Wins and Joint Ventures

Glencore to acquire 49% stake in Hunter Valley Operations

27 July 2017 13:08

Glencore has announced that it has signed agreements with Yancoal Australia regarding the acquisition of a 49% interest in the Hunter Valley Operations (HVO) coal mine in NSW and form a Joint Venture following Yancoal's acquisition of Coal & Allied from Rio Tinto.

Glencore will pay $1,139m plus a 27.9% share of $240m non-contingent royalties over five years and 49% of price contingent royalties payable by Yancoal to Rio Tinto on production from HVO, in respect of the C&A acquisition.

In addition, Glencore will acquire a 16.6% interest in HVO directly from Yancoal and the companies will work together to acquire Mitsubishi Development's 32.4% interest in HVO to achieve Glencore's 49% stake.

Under the agreement, Glencore will be entitled to its share of the profits of HVO from the date that Yancoal completes its acquisition of C&A.

Glencore has also agreed to subscribe for $300m worth of shares in Yancoal's equity raising.

The transaction will be funded from Glencore's existing cash resources and committed facilities and is subject to Glencore obtaining the necessary regulatory approvals.

Glencore expects the transaction to close within six months.

At 1:08pm: (LON:GLEN) Glencore PLC share price was +2.35p at 332p

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Related Company: GLEN

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