Yancoal Australia is set to acquire Mitsubishi Development’s (MDP) 28.9% interest in the Warkworth joint venture (JV) for $230m after exercising its call option.

The acquisition is expected to strengthen Yancoal’s operations in the Hunter Valley region of New South Wales (NSW) in Australia.

Once the transaction is complete, the Yancoal group is set to own around 84.5% of the Warkworth JV, which is said to increase its share of coal production from the integrated Mount Thorley Warkworth (MTW) operations from 64.1% to 82.9%.

Yancoal Australia CEO Reinhold Schmidt said: “By exercising the call option, we are strengthening our position within the Hunter Valley and progressing our long-term strategy for continued growth and investment into tier one assets.”

“Last year, MTW produced 12.3 million tonnes of saleable coal.”

Last year, MTW produced 12.3 million tonnes of saleable coal.

The transaction is subject to receipt of approval from the Foreign Investment Review Board (FIRB), and the waiver of existing, pre-emptive rights held by the other minority Warkworth JV participants. It is scheduled to close by early March 2018.

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The current development comes after Yancoal completed the acquisition of Coal & Allied Industries from Rio Tinto for $2.69bn earlier this month. Rio Tinto rejected repeated offers from Glencore for Coal & Allied.

In July, Glencore signed agreements to acquire a 49% interest in Yancoal’s Hunter Valley Operations (HVO) coal mine for $1.13bn, in addition to royalty payments.