Bloomfield will acquire the Integra open cut mine together with the wash plant and rail loop facilities, while Glencore will acquire the Integra underground operations, which had been placed in care and maintenance in July 2014 because of the adverse market conditions.

Glencore will have the right to utilise the wash plant and rail loop facilities on a cost plus basis. The Integra underground leases lie adjacent to Glencore’s 100% owned Mt Owen open cut mine, which produced 8.2 million tonnes of Run-of-Mine coal in 2014.

The Integra open cut operations lie adjacent to Bloomfield’s Rix’s Creek mine, which currently utilises the Integra rail loop.

The underground operation (formerly known as the Glennies Creek underground mine) holds reserves of over 35Mt of premium semi-hard coking coal and has an approved production rate of 4.5Mtpa ROM.

Glencore head of Australian coal operations Ian Cribb said the Integra underground leases lie immediately to the south of Glencore’s existing coal operations.

“This acquisition provides Glencore with future optionality to realise synergies from adjoining tenements,” he said.

“While the Integra underground had been a profitable semi-hard coking coal mine in the past, it was placed on care and maintenance in 2014 and Glencore has no plans to restart the operation in the near term. We intend to evaluate a number of options for the Integra underground mine in the months ahead.”

The open cut operation (formerly known as the Camberwell open cut mine) has a capacity of 3.6Mtpa of thermal and semi-soft coking coal. All coal is railed approximately 100km to the Port of Newcastle for export.

The Integra open cut mine will be renamed “Rix’s Creek North” and would run as a bolt on to Bloomfield’s Rix’s Creek business, which lies adjacent to the south.

Bloomfield managing director John Richards said: “This is a logical and unique opportunity that would strengthen our ability to operate over the long term.

“The deal would breathe new life into the Integra open-cut site and will sustain local employment.

“Combining Integra open cut into our Rix’s Creek operations can deliver synergies in administration and overall operations. We would envisage spending the remainder of 2015 working through a number of issues before mining at Integra open cut can resume on a modest scale.”

Richards said that the long term future of the coal industry was sound with solid demand growth for coal throughout advanced and developing countries. New high efficiency power plants and other technologies are helping to reduce emissions from power generation.

The transaction agreement with Vale and its five joint venture partners remains subject to customary closing conditions, including regulatory approvals, and is expected to close in the next few weeks.