Glencore looking to sell Australian coal haulage business

16 March 2016 (Last Updated March 16th, 2016 18:30)

Swiss mining company Glencore is reportedly planning to put up its Hunter Valley coal haulage unit in Australia for sale, which could fetch approximately $1bn.

Swiss mining company Glencore is reportedly planning to put up its Hunter Valley coal haulage unit in Australia for sale, which could fetch approximately $1bn.

The unit known as 'GRail' is operated by the US-based railroad holding company Genesee & Wyoming's subsidiary and was established by Xstrata in 2010.

A Glencore spokesman told The Australian Financial Review: "The potential sale is in response to strong global demand for high quality infrastructure assets and forms part of Glencore's wider global debt reduction programme."

The sale is expected to be finalised by the third quarter of 2016 and is planned by Glencore in a bid to cut debt by approximately $8bn.

"The potential sale is in response to strong global demand for high quality infrastructure assets and forms part of Glencore's wider global debt reduction programme."

Glencore has reportedly invested about $350m in the 'GRail' business.

The sale decision comes as the company considers that the firm is no longer strategic.

GRail owns nine trains that haul coal, produced by Glencore's mines in the Hunter Valley to the port of Newcastle located on the east coast.

In February 2016, the company announced to refinance and replace the existing $8.45bn revolving credit facility (RCF) with a new $7.7bn deal.

Glencore received commitments from its senior banks for $8.4bn in this initial pre-syndication phase.