Whitehaven Coal has secured the required approvals to complete a 30 per cent selldown of Blackwater mine for about $1.7 billion.

The transactions to sell a 20 per cent stake in the Blackwater operation to Nippon Steel Corporation and 10 per cent to JFE Steel Corporation will complete on March 31.

The company said the proceeds would strengthen Whitehaven’s balance sheet ahead of it making the first of three scheduled deferred payments to BMA for the acquisition of Daunia and Blackwater.

“We are excited to be commencing a joint venture with Nippon Steel and JFE Steel, two long-term customers who recognise the attractiveness of Blackwater’s metallurgical coal products and the importance of securing supply for the longer-term,” Whitehaven chief executive officer and managing director Paul Flynn said.

Whitehaven completed its acquisition of BMA’s Daunia and Blackwater metallurgical coal mines in early April 2024.

The first scheduled payment of $US500 million (about $788 million in Australian dollars) is due on April 2 this year, while a second payment of $US500 million is due a year later and the final scheduled payment of $US100 million (about $157 million) is due on April 2, 2027.

Whitehaven reported an underlying net profit after tax (NPAT) of $328 million for the six months ended December 31.

“FY25 is the first full financial year of Whitehaven’s ownership of the Queensland operations at Daunia and Blackwater, and I’m delighted to report a strong first half result,” Mr Flynn said.

“Operational performance at Daunia and Blackwater – and across our NSW mines – has been in line with or better than plan, and demand for Whitehaven’s metallurgical and thermal coal products continues to prove strong.

“Prices held up well in the half year and margins remain attractive, despite relatively soft market conditions.

“For the half year, we delivered an underlying EBITDA of $960 million compared with $632 million in the first half of FY24. The first half result includes $588 million of EBITDA from the Queensland business.

“Whitehaven is benefiting from increased scale and diversification into metallurgical coal, and the structure of the acquisition including deferred payments, coal-price contingent payments and the selldown of 30 per cent of Blackwater is creating value for Whitehaven’s shareholders.

“Whitehaven will return up to $144 million of capital to shareholders through a 9 cent fully franked interim dividend and a modest share buy-back of equal value over the next six months. This represents a total payout ratio of about 44 per cent of underlying group NPAT for the half year.”