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Australia’s New Hope has acquired a 15% stake in Malabar Resources for A$94.4m ($65.25m) through a wholly owned unit.

The acquisition forms part of the firm’s efforts to boost its coal business amid increasing commodity prices, which reached record highs following Western sanctions on Russia for its invasion of Ukraine.

Malabar owns the Maxwell underground metallurgical coal project located 10km south-west of Muswellbrook in the Hunter Valley, New South Wales (NSW). Construction of the project started in May 2022.

The transaction also aligns with New Hope’s plan to invest excess cash into coal assets that are ‘low on the cost curve’ and have long life approvals.

The firm also looks to diversify its asset base by increasing exposure to metallurgical coal mined by low-impact, underground methods.

In a press statement, New Hope said: “The past few months have seen heightened focus on maintaining energy security as a core component of navigating a just transition to a decarbonised economy.

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“This has supported thermal coal pricing over the second half of the year and we expect pricing to remain at historically high levels for the short to medium term.”

Mining leases for the Maxwell Mine were granted in November 2021 and the project has received the final state and federal approval.

With an anticipated operational life of more than 25 years, the Maxwell Mine has proven and probable reserves of 144 million tonnes.

Malabar also owns the 25MW Maxwell Solar Farm located on rehabilitated mine land within the NSW government’s designated Hunter-Central Coast Renewable Energy Zone; Spur Hill exploration project (EL 7429); among others.