Mitsubishi accepts Yancoal’s proposal to acquire HVO JV stake


Mitsubishi Development has accepted Yancoal Australia’s offer to acquire its 32.4% interest in the Hunter Valley Operations Joint Venture (HVO JV) in New South Wales for $710m. 

Located 24km north-west of Singleton in the state's Hunter Valley region, Hunter Valley Operations is 67.6% owned by C&A and 32.4% by Mitsubishi. 

Recently, Glencore made a proposal to acquire Mitsubishi’s HVO and Warkworth (WW) coal mines for $920m, associated with its offer to purchase Rio Tinto’s subsidiary Coal and Allied Industries (C&A) for $2.55bn. 

Under the agreement with Yancoal, Mitsubishi has also agreed to grant the company a call option to purchase its 28.9% interest in the WW operation for $230m.

In January, Rio Tinto signed an agreement to sell 100% of its shares in C&A to Yancoal. The decision to sell C&A to either bidder rests with Rio Tinto.

"Although Mitsubishi accepted the offers made by Yancoal and Glencore, the HVO JV interest sale hinges on selling C&A."

Although Mitsubishi accepted the offers made by Yancoal and Glencore, the HVO JV interest sale hinges on selling C&A. The company has the option to sell the interest to either party.

In addition, Yancoal has received approval from the National Development and Reform Commission (NDRC) of People’s Republic of China (PRC) for its acquisition of C&A from Rio Tinto. 

Other regulatory approvals obtained in this regard include those from state-owned Assets Supervision and Administration Commission (SASAC) of Shandong Provincial Government, and Ministry of Commerce of PRC.

In the event that Rio Tinto chooses Glencore for the sale of C&A, Yancoal will have a right to match or better that proposal.


Image: Hunter Valley Operations. Photo: courtesy of Rio Tinto.