Yancoal Australia (ASX: YAL) has agreed to buy an 80% stake in the Kestrel coking coal mine in Queensland for as much as $2.4 billion, strengthening its position among Australia’s largest coal producers.
The company will acquire the majority stake in the Bowen Basin mine from Hong Kong-based private equity firm EMR Capital and Alamtri Resources Indonesia (IDX: ADRO). The deal includes an upfront cash payment of $1.85 billion at closing and as much as $550 million in additional annual payments over five years, subject to certain conditions.
Yancoal said it plans to fund the acquisition with a mix of available cash, a $1.2-billion five-year syndicated acquisition loan facility and other financing options. The company, controlled by China’s Yankuang Energy (SHA: 600188), said the purchase would deepen its foothold in the Bowen Basin, where Kestrel sits near Yancoal’s existing Middlemount joint venture and Yarrabee operation.
Australia’s top coal mine
“The acquisition was a strategic fit for the company and adds a high-quality mine to its portfolio,” CEO Sharif Burra said. “Kestrel delivers increased scale and diversification to Yancoal’s portfolio and is expected to contribute premium metallurgical coal into our product mix.”
Kestrel, Australia’s largest producing underground coal mine, recorded saleable production of 5.9 million tonnes in 2025, Yancoal said. The deal is expected to close by the end of this year’s third quarter.
A year ago, Yancoal said it was setting aside $1.2 billion for acquisitions.
EMR and Alamtri bought the 80% stake from Rio Tinto (LSE, NYSE, ASX: RIO) for $2.25 billion in 2018. The remaining 20% is held by Japanese trading house Mitsui & Co. (TYO: 8031).
Shares in Yancoal Australia fell 1% on Tuesday to close at A$7.23 apiece, valuing the company at A$9.55 billion ($6.82 billion). They’ve traded in a 52-week range of A$4.70 to A$9.06.
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