Australian miner Rio Tinto has announced that it has signed binding agreements for the sale of its entire interests in the Hail Creek coal mine, the Valeria coal development project, the Winchester South coal development project and the Kestrel underground coal mine, all in Queensland, Australia. With the sale of its Queensland coal assets, Rio Tinto has completed its exit from the coal business. The company will continue to focus on its iron ore, aluminum, copper and bauxite businesses.
Accordingly, Rio Tinto has signed a binding agreement with international commodities producer and trader Glencore for the sale of its entire 82 percent interest in the Hail Creek coal mine and its entire 71.2 percent interest in the Valeria coal development project for a total consideration of $1.7 billion.
The company has also entered into a binding agreement with Australian coal producer Whitehaven Coal Limited for the sale of its entire 75 percent interest in the Winchester South coal development project for a consideration of $200 million.
In addition, Rio Tinto has signed an agreement with a consortium comprising private equity manager EMR Capital (EMR) and Indonesia-based coal company PT Adaro Energy Tbk (Adaro), for the sale of its entire 80 percent interest in the Kestrel underground coal mine for a consideration of $2.25 billion.
The company stated that the total amount achieved from the divestments of its Queensland coal assets amounted to $4.15 billion and the funds will used for general corporate purposes.
Rio Tinto chief executive Jean-Sebastien Jacques stated that the sale of the company's coal mines and its undeveloped coal projects will leave its portfolio stronger and more focused on delivering the highest returns through targeted allocation of capital.