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Adaro and EMR diversify into Australian metallurgical coal with US$2.25 billion Kestrel acquisition

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10 April 2018

Adaro and EMR diversify into Australian metallurgical coal with US$2.25 billion Kestrel acquisition

Report summary

On 27 March, Adaro Energy and EMR Capital announced they had jointly agreed to purchase Rio Tinto's 80% interest in the Kestrel coking coal mine in Queensland for US$2.25 billion in cash. The total consideration payable by Adaro and EMR may rise up to US$2.81 billion should Mitsui decide to exit its 20% interest for up to US$563 million. In this insight, we assess the metrics of the deal and strategic rationale of all parties involved.

Table of contents

  • Overview
    • Kestrel
  • Deal analysis
  • Strategic rationale, upside and risks

Tables and charts

This report includes 9 images and tables including:

  • Deal summary
  • Location map
  • Summary valuation
  • Valuation metrics
  • Economic assumptions
  • Adaro and EMR's bid signals further recovery in deal-implied benchmark hard coking coal prices
  • Adaro pro-forma production profile - metallurgical coal (attributable)
  • Seaborne metallurgical coal total cash cost curve 2018 (US$/tonne)
  • Marketable reserves (1 July 2018)

What's included

This report contains:

  • Document

    Adaro and EMR diversify into Australian met coal with Kestrel acquisition.xls

    XLS 2.52 MB

  • Document

    Adaro and EMR diversify into Australian metallurgical coal with US$2.25 billion Kestrel acquisition

    PDF 385.55 KB

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