The deal, which did not come with a price tag, has been brewing for some time. 

Glencore began the sales process for the underground mine in May last year after reversing an earlier decision to discontinue mining at the operation.

GFG is a London-headquartered group of energy, mining, metals, engineering and financial services businesses run by British-Indian billionaire Gupta. 

While its steelmaking business is mainly focused on the production of what it calls ‘Greensteel' - involving the melting and processing of steel scrap via electric arc furnace - it acquired Arrium's Whyalla steelworks, which operates a blast furnace fed with coking coal and iron ore, in South Australia last year.

Just before Christmas, GFG outlined its plans for the A$1 billion transformation of the Whyalla steelworks, including its modernisation and increases in capacity.

GFG said the acquisition of Tahmoor is a "key element in the GFG Alliance's transformation plan" for Whyalla, with Gupta saying it "secure[s] and derisk[s] an important feed" for the steelworks.

"This, together with our iron ore mines in South Australia, now makes GFG the only fully-integrated Australian steel producer, whether from iron ore and coking coal to primary steel, or from scrap metal and renewable energy to Greensteel," Gupta said.

Tahmoor, around 75km southwest of Sydney, comes with production of around 2 million tonnes per annum, the bulk of which is high-quality coking coal. 

While no acquisition price has been disclosed, an earlier report from the Financial Times quoted a source with knowledge of the deal saying the final price was under US$100 million. Back in July, Bloomberg reported the asset could fetch as much as A$500 million.

In August 2016, Glencore announced it would not continue mining beyond 2018 at Tahmoor on the basis ongoing operations would not meet its internal investment criteria. However, given the increase in coking coal prices, it ended up recommencing development for additional longwall blocks in the North West area.  

It also requested updated assessment requirements for the Tahmoor South project, which could add another 2.5Mtpa of coal to Tahmoor's production mix. 

Tahmoor had 57Mt of reserves and 650Mt total resource, as of May 2017. 

The deal is expected to close by the end of the March quarter.