Yancoal Australia has completed its purchase of an 80% interest in Queensland’s Kestrel Coal Mine, paying $1.85bn upfront for a large-scale metallurgical coal asset.
The company acquired the entire share capital of Kestrel Coal Group, which holds the stake in the Bowen Basin operation, from EMR Capital Advisors, Kestrel Coal (EMR), Adaro Capital and EMR Capital Management.
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This follows the signing of binding transaction documentation in April 2026.
The overall consideration for the transaction may reach up to $2.4bn, with an additional contingent payment of up to $550m payable over five years if coal prices exceed a specified benchmark.
Yancoal funded the acquisition using available cash and an initial drawdown of a five-year syndicated $1.2bn acquisition loan facility.
The company also has an undrawn $200m working capital facility to support liquidity and intends to cover any contingent consideration using operating cash flows generated by the combined business.
It will begin recognising the production, revenue and earnings attributable to its Kestrel interest from 1 October 2026.
Yancoal CEO Sharif Burra said: “The acquisition of an 80% interest in the Kestrel Coal Mine represents a strong strategic fit for Yancoal and adds a high-quality, long-life metallurgical coal asset to our portfolio.
“Kestrel delivers increased scale and diversification to Yancoal’s portfolio; it adds a premium metallurgical coal to our product mix. The acquisition positions us to deliver greater value to our shareholders and consolidates Yancoal’s position as a leading Australian coal miner.”
The Kestrel mine has been operational since 1992 and produces metallurgical coal used by steel-makers worldwide.
In 2025, the mine recorded saleable output of 5.9 million tonnes (mt) on a 100% basis and is underpinned by 164mt of marketable coal reserves, with potential resources reaching 406mt.
The operation has approval to continue until 2033, with the possibility of reserves being mined to 2050.
All production is shipped from Gladstone Port, with India as the largest export destination.
Yancoal stated that the acquisition strengthens its position in the Bowen Basin, adding to its nearby Middlemount joint venture and Yarrabee operation, and will increase its share of metallurgical coal production up to 22% on a pro forma basis.
