By Rhiannon Hoyle


BlueScope Steel said has waived its pre-emptive right to buy South32's Illawarra Metallurgical Coal business and agreed to an improved supply arrangement with the planned buyers.

South32 said in February it had signed a deal to sell the coal operation in Australia's New South Wales state for up to $1.65 billion to an entity owned by Golden Energy and Resources, and M Resources. BlueScope held pre-emption rights, however, under an existing coal-supply agreement.

BlueScope, which buys coal for its Port Kembla Steelworks, said it supports the sale to Golden Energy and Resources, and M Resources, and has "had strong engagement" with the companies.

The companies have agreed to a number of improvements to the supply agreement, including a one-year extension of the contract, to 2033, and a commitment to review a potential extension of supply beyond then, BlueScope said.

Golden Energy and Resources is an Asia Pacific-focused resources company whose investments include a 59% interest in Stanmore Resources, an Australian metallurgical coal producer. M Resources, which also has an interest in Stanmore, specializes in trading metallurgical coal for steel manufacturing.

South32 separately acknowledged BlueScope had waived its pre-emptive right and said the sale is on track to be completed in the first half of its 2025 fiscal year.


Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com


(END) Dow Jones Newswires

05-27-24 1928ET