BHP Billiton New Mexico Coal has finalised the sale agreement for the San Juan Mine to Westmoreland Coal Company (WCC).
Initially announced in May, the deal is expected to be complete at the end of the calendar year.
Upon completion of the agreement, WCC will assume complete operation of the mine with effective from 1 January 2016.
During the remainder of 2015, BHP Billiton New Mexico Coal will work with WCC to ensure a smooth ownership transition.
According to BHP, the completion of the sale process will allow coal to be supplied to the San Juan Generating Station (SJGS) beyond 2017.
The sale process is also conditional on the Public Service Company of New Mexico (PNM), obtaining necessary approvals from the New Mexico Public Regulatory Commission (NMPRC).
BHP Billiton New Mexico Coal president Pat Risner said that the agreement reached with WCC would ensure the continuation of operations at the San Juan Mine and provide jobs, sustained revenue stream for local communities.
Pat Risner said: "We will continue to work closely with our employees and the communities we serve to ensure a smooth ownership transition to WCC."
BHP plans to file the sale agreement with the NMPRC as part of a comprehensive filing that needs to be made on 1 July by PNM.