Rio shareholders back Yancoal

CHINA’S Yancoal has sealed a $US2.69 billion deal to buy Rio Tinto’s NSW coal operations after the local mining giant’s shareholders overwhelmingly backed the sale.

More than 97 per cent of shareholders at general meetings in London and Sydney voted in favour of the Yancoal offer, Rio Tinto said.

The sale comes after a surprise bidding war between Yancoal and commodities trader Glencore and marks Rio Tinto’s near exit from thermal coal assets.

Analysts have valued the Coal & Allied business at about $US2 billion and believe the sale will boost returns for Rio Tinto shareholders from assets that the company does not consider as core business.

Rio Tinto confirmed earlier this week that it would back Yancoal’s revised bid over a $US2.675 billion cash bid from Glencore.

Glencore put forward its revised offer after an earlier bid was rejected by Rio’s board.

Rio chairman Jan du Plessis yesterday reaffirmed the board’s belief that the Yancoal bid offered greater transaction certainty and a higher net present value.

Yancoal’s offer includes a cash payment of $US2.45 billion plus another $US240 million in royalty payments.

The deal includes majority stakes in the Hunter Valley Operations and Mount Thorley Warkworth mine and a 36.5 per cent interest in the Newcastle Port coal export terminal.