Peabody Energy and Glencore have agreed to form a joint venture (JV), to combine their coal mines in New South Wales, Australia.
The JV is part of the companies’ plan to improve productivity, reduce costs and extending mine life amidst falling coal prices.
Under the deal, operations at Peabody’s Wambo open-cut mine and Glencore’s United mine in Hunter Valley region will be combined.
The combined mining operations will be managed by Glencore, while Peabody will continue to operate coal washing and loading facilities.
In the combined operation’s output, Peabody’s share will be consistent with Wambo open-cut mine’s historical volumes of around three million tons per year.
Peabody Energy president and COO Glenn Kellow said: "Peabody continues to take positive steps to further reduce costs, improve our competitive position and create value.
"This combined operation is expected to deliver substantial synergies to both parties while providing on-going local employment opportunities and economic contributions."
Subject to regulatory permitting, the JV arrangement is expected to commence in 2017.
The proposed plans have no impact on Peabody’s North Wambo underground operations.
Image: The JV will combine operations of Peabody’s Wambo open-cut mine and Glencore’s United mine in Hunter Valley region. Photo: courtesy of Peabody Energy, Inc.