Yancoal Australia has completed the transaction to take over Kestrel Coal Group, which holds an 80 per cent stake in the Bowen Basin’s Kestrel mine.

The upfront cash consideration paid on completion was $US1.85 billion (about $2.66 billion) subject to customary completion adjustments.

Payment of up to $US550 million ($792.5 million) more remains dependent upon the relevant benchmark coal price exceeding $US225/tonne (nominal) in any of the first five years following completion.

Kestrel – 40km north-east of Emerald – is the largest producing underground coal mine in Australia, clocking up saleable production of 5.9Mt last year, and has a 25-year mine life.

“The acquisition of an 80 per cent interest in the Kestrel coal mine represents a strong strategic fit for Yancoal and adds a high-quality, long-life metallurgical coal asset to our portfolio,” Yancoal (ASX: YAL) chief executive officer Sharif Burra said.

“Kestrel delivers increased scale and diversification to Yancoal’s portfolio; it adds a premium metallurgical coal to our product mix.

“The acquisition positions us to deliver greater value to our shareholders and consolidates Yancoal’s position as a leading Australian coal miner.

“We have worked closely with EMR, Adaro and KCG management over the past months to facilitate integration of Kestrel into the Yancoal portfolio.

“We look forward to working closely with the committed Kestrel employees, and Mitsui, our joint venture partner and owner of 20 per cent of Kestrel, to continue to add value to the mine, local communities and stakeholders.”