(Updates with new details on mandates, valuation)
By Clara Denina and Melanie Burton
LONDON/MELBOURNE, June 24 (Reuters) - The world's largest mining company BHP Group BHP.AX BHPB.L has hired Macquarie Bank and JP Morgan to sell its Australian thermal coal mine, three sources said, as miners face increasing pressure to reduce their exposure to fossil fuels.
BHP's BHP.AX BHPB.L Mt Arthur open cut mine, in the Hunter Valley region of New South Wales, supplies thermal coal used as fuel for power plants, to domestic and international customers. Prices have tumbled this year, slashing BHP's likely sale price to less than $1 billion, two banking sources said.
BHP and U.S. investment bank JP Morgan declined to comment. Australian bank Macquarie did not immediately respond to a request for comment.
BHP previously said that the thermal coal business is a very small part of their portfolio, contributing about 3% of turnover and said in February that if a good offer came along they would be willing to sell. investor Elliott, which holds a 4.7% stake in the mining company, has pushed for the sale of BHP's thermal coal assets, which include one third of the Cerrejon mine in Colombia.
BHP has also been pressured by green groups and some shareholders to leave any industry associations with policies that fail to match the company's support for the 2015 Paris climate accord.
Rival mining companies have also taken steps to go thermal coal free, with Rio Tinto RIO.AX RIO.L selling its last coal mines in 2018, and Anglo American AAL.L considering the spinoff or sale of its South African coal operations within the next two or three years.
There is a handful of companies including Australia's Whitehaven Coal Ltd WHC.AX , China's Yancoal YAC.AX and India's Adani Enterprises ADEL.NS that have expressed interest in the Mt Arthur mine, the sources said.
Sales processes have slowed over the past few months, as government lockdowns to contain the novel coronavirus halted mine visits and due diligence.
But as lockdown measures are gradually lifted, banking sources expect a sale for Mt Arthur could be possible by the end of the year.