Rio Tinto continues to divest its interests and has made a binding agreement with New Hope Corp. Ltd, which entails New Hope purchasing 40% interest in the Bengalla coal Joint Venture in Australia for US$606 million.
The sale is expected to close in the 1Q16 and will bring the value of Rio Tinto’s divestments to US$4.5 billion since January 2013.
Rio Tinto Copper & Coal Chief Executive, Jean-Sébastien Jacques, commented: “This sale will deliver value for our shareholders as we remain focused on continuing to develop the strongest core portfolio of assets in the mining industry … It demonstrates our commitment to further strengthening our balance sheet, maintaining a disciplined approach to allocating capital across the Group and delivering strong returns for shareholders through the cycle.
Bengalla is the smallest of three coal mines in the Hunter Valley of New South Wales in which Rio Tinto holds an interest. It produced 8.6 million t (3.4 million t based on a 40% Rio Tinto share) in 2014.
Jacques continued: “Bengalla mine is a robust, well-managed business with a productive workforce and we believe it will have a positive future under the new owner with different capital allocation priorities. We expect the business to make a significant and ongoing contribution to the New South Wales economy. Rio Tinto will ensure high safety and environmental standards are maintained through the transition to the new owners.”
The transaction was dependent on various conditions being met, such as the pre-emption rights of the Bengalla Joint Venture partners.
Rio Tinto and Mitsubishi Development recently agreed a simplification to the ownership structure of Coal & Allied which helps facilitated the Bengalla transaction.
Under the agreement, Rio Tinto will assume 100% ownership of Coal & Allied and Mitsubishi Development will move from holding a 20% stake in Coal & Allied to holding a direct 32.4% stake in the Hunter Valley Operations mine.
Edited from press release by Harleigh Hobbs for Worldcoal.com