London-listed mining and commodities group Glencore has sold its coking coal operations in Australia to GFG Alliance for an undisclosed sum, the two companies announced on Tuesday.
GFG, headed by British industrialist Sanjeev Gupta (left), purchased the Tahmoor facility looking to shore up its Wyhalla Steel operations in southern Australia and build a fully-integrated smelting business through strategic acquisitions.
While no financial details were disclosed on the sale, Reuters cited sources familiar with the sales process that said the mine would sell for around $100m.
Gupta, chief executive of GFG, said: "Through this purchase we secure and de-risk an important feed for the Whyalla Steelworks."
"This, together with our iron ore mines in South Australia, now makes GFG the only fully-integrated Australian steel producer."
While steel prices rose during 2017, prices have been falling more recently as factories in China reduce output in order to comply with government-enforced pollution controls. Spot steel rebar prices fell 1% on the Shanghai Futures Exchange.
Iron ore prices have also fallen recently. On the Dalian Commodity Exchange on Tuesday, iron ore prices fell 3.2%. Coking coal prices also fell, down 2.6%.
While GFG is not listed, shares in Glencore were buoyed 1.25% to 387.51p on the London Stock Exchange in early trade.