A surprising joint venture has been struck between Peabody’s Wambo open cut coal mine and Glencore’s United mine in the Hunter Valley of New South Wales.
In a statement released by Peabody this morning, the company said the deal was about reducing costs and extending mine life for both operations.
Glencore will manage operations of both mines while Peabody will continue to operate coal washing and loading facilities.
The cooperative arrengement is scheduled to start in 2017.
Peabody’s North Wambo underground operations are not affected by the deal.
“Peabody continues to take positive steps to further reduce costs, improve our competitive position and create value,” Peabody Energy President and Chief Operating Officer Glenn Kellow said in the statement. “This combined operation is expected to deliver substantial synergies to both parties while providing ongoing local employment opportunities and economic contributions.”
Peabody’s share of the combined operation’s output is expected to remain consistent with Wambo Open-Cut Mine’s historical volumes of approximately 3 million tons per year.
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