Rio com­pletes coal exit

The Australian Mining Review - - NEWS - EL­IZ­A­BETH FABRI

“The sale of Kestrel, to­gether with the an­nounced di­vest­ments of Hail Creek and our un­de­vel­oped coal projects, de­liv­ers ex­cep­tional value to our share­hold­ers and will leave our port­fo­lio stronger.”

RIO Tinto has com­pleted its exit from the coal in­dus­try af­ter agree­ing to sell its re­main­ing QLD coal as­sets for $US4.15 bil­lion.

The min­ing gi­ant has been on a sell­ing spree in re­cent years, let­ting go of as­sets such as its $US2.7 bil­lion Hunter Val­ley Op­er­a­tions (HVO) to fo­cus on growth in iron ore and cop­per.

In March, Glen­core was named the win­ning bid­der for Rio’s 82 per cent in­ter­est in Hail Creek open cut mine and its 71.2 per cent in­ter­est in the un­de­vel­oped Va­le­ria project, pay­ing $US1.7 bil­lion for the as­sets.

Days later, Rio en­tered a bind­ing agree­ment to sell its 75 per cent in­ter­est in Winch­ester South un­de­vel­oped coal project to White­haven for $US200 mil­lion.

The next project on the chop­ping block was Rio’s 80 per cent in­ter­est in Kestrel, which was sold to a con­sor­tium com­pris­ing pri­vate eq­uity man­ager EMR Cap­i­tal and In­done­sian listed coal com­pany PT Adaro En­ergy Tbk for $US2.25 bil­lion.

Rio Tinto chief ex­ec­u­tive J-S Jac­ques said the sale of the coal as­sets was in line with its strat­egy of strength­en­ing its port­fo­lio, and al­lo­cat­ing cap­i­tal to the high­est value op­por­tu­ni­ties.

“The sale of Kestrel, to­gether with the an­nounced di­vest­ments of Hail Creek and our un­de­vel­oped coal projects, de­liv­ers ex­cep­tional value to our share­hold­ers and will leave our port­fo­lio stronger,” Mr Jac­ques said.

In a state­ment, Glen­core – which pur­chased a 49 per cent in­ter­est in HVO fol­low­ing Yan­coal’s ac­qui­si­tion of Rio’s Coal & Al­lied busi­ness in June 2017— said its Aus­tralian coal di­vi­sion pro­duced more than 87 mil­lion tonnes of saleable coal in 2017 from 17 op­er­a­tional mines in QLD and NSW.

Hail Creek will add a fur­ther 9.4 mil­lion tonnes of coal to Glen­core’s an­nual pro­duc­tion.

Aus­tralian re­sources pri­vate eq­uity firm and new Kestrel owner EMR Cap­i­tal has also been mak­ing moves in the in­dus­try with nine op­er­a­tions world­wide, in­clud­ing the Golden Grove base and pre­cious met­als mine in WA.

The three sales were ex­pected to fi­nalise in the se­cond half of 2018, sub­ject to reg­u­la­tory ap­provals.

Im­age: Rio Tinto.

Hail Creak mine and the un­de­vel­oped Va­le­ria project are in the Bowen Basin, QLD.

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