Whitehaven Coal has agreed to sell a 7.5% stake in its Narrabri joint venture coal project in Australia’s New South Wales to a Korean consortium for A$125m.

The consortium, comprising Daewoo International and Korea Resources, will pay the purchase price in three tranches for the project that is a joint venture between Whitehaven, Electric Power Development, EDF Trading and Upper Horn Investments.

As part of the deal the Korean firms have also agreed to pay of all costs incurred since 1 January 2008, estimated to be A$11m, and 7.5% of the project’s future costs, Whitehaven said.

Whitehaven, which now owns 70% of the joint venture, would sell up to 1.5 million tonnes per year of Korean specification coal to Daewoo from any of its coal projects, representing 25% of Narrabri’s annual production over its mine life.

The presence of Korean companies will help mitigate market and counterparty risks, Whitehaven managing director Tony Haggarty said.