Rio Tinto exits coal mining with sale of remaining Australian assets

2 August 2018 (Last Updated June 18th, 2020 14:00)

Rio Tinto exits coal mining in Australia by selling its remaining assets in Queensland for $3.95bn.

Rio Tinto exits coal mining in Australia by selling its remaining assets in Queensland for $3.95bn.

The assets sold by the company include its interests in the Hail Creek coal mine and Valeria coal development project to Glencore for $1.7bn.

“The sale of our remaining Australian coal assets delivers exceptional value to our shareholders.”

The company also divested its 80% interest in the Kestrel underground coal mine, which is located 40km north-east of Emerald in central Queensland and produces coking coal, to a consortium comprising EMR Capital and PT Adaro Energy for a consideration of $2.25bn.

Rio Tinto chief executive J-S Jacques said: “The sale of our remaining Australian coal assets delivers exceptional value to our shareholders.

“Once again, I would like to thank the many people across Rio Tinto and the communities in which we operate who have contributed to the coal business.”

Last year, production from the Kestrel mine stood at 5.1 million tonnes of saleable coal.

The mine is estimated to have marketable reserves of 146 million tonnes and mineral resources of 241 million tonnes.

As a result of the assets’ sale, the company revised its production guidance for this year to four million tonnes of hard coking coal and 2.5 million tonnes of thermal coal.

The company posted underlying and net earnings of $4.4bn and free cash flow of $2.9bn for the first half of this year.

Rio has been engaged in divesting its coal assets in the country. Last year, the mining major sold its wholly-owned subsidiary Coal & Allied Industries to Yancoal Australia for $2.69bn.

In June this year, Rio completed the divestment of its entire 75% stake in the Winchester South coal development project in Queensland to Whitehaven Coal for $200m.