GLENCORE said on Tuesday it had completed the purchase of the Cerrejon coal mine in Colombia for a cash total of $101m – much less than originally expected.
At the time the Swiss miner and trading group announced the deal – which was to buy the stakes held by BHP and Anglo American – it estimated a cost of $588m while also taking cash flows for the year, said Bloomberg News.
Glencore estimated a final cost of $230m.
However, the thermal coal price has surged during the period and therefore Glencore said the cash total came in much lower.
Anglo and BHP, which both agreed to sell their stakes for $294m each, have been in the process of exiting the fuel amid increasing pressure from shareholders over mining the most polluting fossil fuel, said the newswire.
While the deal marks the end of thermal coal mining for Anglo, BHP’s future is less certain as it mulls the continued ownership of its last mines in Australia, it said.
Benchmark prices for thermal coal exported from Australia hit a record in October, though pulled back after China rolled out measures to ease a supply crunch that contributed to power shortages. Still, prices continue to be volatile amid concerns around exports from Indonesia.
The Cerrejon purchase was the last major deal of former CEO Ivan Glasenberg, before he left Glencore at the end of June, ending two decades at the helm of the world’s biggest commodity trader.