Yancoal seals $3.5b Rio deal

CHINESE group Yancoal has sealed a $3.5 billion deal to buy Rio Tinto’s coal operations in New South Wales after investors overwhelmingly backed the sale.

More than 97 per cent of Rio shareholders at general meetings in Australia and Britain voted in favour of the offer, the Anglo-Australian mining titan said yesterday.

It comes after a bidding war between Yancoal and Swiss commodities trader Glencore and marks a near exit of Rio from thermal coal assets.

Rio Tinto confirmed earlier this week that it would back Yancoal’s revised bid of $US2.69 billion ($3.51 billion) over a $US2.675 billion cash bid from Glencore.

Analysts had valued the business, called Coal and Allied, at about $US2 billion.

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

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

The Yancoal deal is expected to be completed in the coming quarter.

Rio shares surged 3.3 per cent, or $2.05, to $63.39 yesterday during a strong session for iron ore miners more broadly.