AQC Australian Pacific Coal Ltd

By Razak Musah Baba

LONDON--Anglo American PLC (AAL.LN) has agreed to sell Dartbrook coal mine to Australian Pacific Coal Ltd. (AQC.AU), for up to 50 million Australian dollars ($35.8 million), as part of the mining firm's restructuring plan to focus on its core assets.

Anglo American said it has entered into a sale and purchase agreement and royalty deed with Australian Pacific as guarantor and a subsidiary of Australian Pacific as purchaser to sell its 83.33% interest in Dartbrook in the Hunter Valley, New South Wales, Australia.

Under the terms, Australian Pacific will buy Anglo American's interest in Dartbrook for up to A$50 million, comprising an upfront cash payment of A$25 million and the grant of a royalty equal to A$3.0 for each ton of coal produced by the operation in the future and A$0.25 for each ton of coal sourced from other sites and processed using Dartbrook's processing infrastructure.

Royalty payments will be subject to escalation with reference to the Brisbane All Groups Consumer Price Index and capped at A$25 million, it said.

The transaction will be effected via a sale of shares in the subsidiary companies holding Anglo American's interest in Dartbrook. The transaction is expected to complete by mid-2016.

Earlier this month, Anglo American announced a radical restructuring of its business that includes more asset sales, larger cost cuts and a suspension of dividend payments in a bid to weather a severe slump in commodity prices.

U.K.-based Anglo, the world's fifth-largest mining company by market value, said it plans to reduce its portfolio of assets by 60% to focus on a smaller pool of assets that are able to generate cash flow through the commodity price cycle.

Shares at 1020 GMT up 3 pence, or 0.8%, at 326 pence, valuing the company at GBP4.57 billion.

Alex MacDonald contributed to this article

Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

(END) Dow Jones Newswires

December 24, 2015 05:58 ET (10:58 GMT)

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