Rio Tinto has agreed to sell its 40% stake in the Bengalla coal joint venture (JV) to Australian coal mining and energy firm New Hope in a $606m deal.
Located in the Hunter Valley of New South Wales, Australia, Bengalla coal mine produced 8.6 million tonnes in 2014.
The agreed sale is expected is to conclude in the first quarter of 2016, with Rio Tinto having now completed divestments of $4.5bn since January 2013.
Coal & Allied bought its stake in Bengalla in 2001 and manages the site on behalf of JV partners, CNA Bengalla Investments (40%), Wesfarmers Bengalla (40%), Taipower Bengalla (10%) and Mitsui Bengalla Investments (10%).
Rio Tinto copper and coal chief executive Jean-Sébastien Jacques said: "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.
"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."
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Recently, Mitsubishi Development signed an agreement for Rio Tinto to assume 100% ownership of Coal & Allied.
The agreement will also see Mitsubishi move from holding a 20% interest in Coal & Allied to owning a direct 32.4% stake in the Hunter Valley Operations mine.
Upon completion of the transaction, as a 100% owner of Coal & Allied, Rio Tinto will hold a 67.6% interest with management rights in the Hunter Valley mine.
Rio Tinto manages Coal & Allied’s coal operations, including Mount Thorley Warkworth, Hunter Valley Operations and Bengalla in the Hunter Valley region.
In March, the New South Wales state government in Australia gave its clearance to Bengalla coal mine to increase output by a third and continue mining until 2038.
The open-cut Bengalla mine uses a dragline truck and shovel method and supplies international markets with up to six million tonnes of thermal coal a year.
Image: Bengalla coal mine is located in the Hunter Valley region of New South Wales. Photo: courtesy of Wesfarmers Resources.