Indian firm Tata Steel will sell its stake in Riversdale Mining to Rio Tinto for a total value of A$1.06bn (US$1.12bn).
Tata Steel holds a 26.27% stake in Riversdale Mining through its subsidiary Tata Steel Global Minerals.
Tata Steel will continue its joint venture with Riversdale Energy, a subsidiary of Riversdale Mining, which owns coal assets in Mozambique.
Rio Tinto will now hold a total of 99.74% of all Riversdale shares.
Rio Tinto Energy chief executive Doug Ritchie said the Riversdale acquisition is in line with the company's strategy to invest and operate long-life, cost-competitive mines and businesses with significant growth potential.
"We have already started to integrate Rio Tinto's world-class operating and technical capability into the operations. We are determined to develop Riversdale's assets in a sustainable, mutually beneficial manner for the people of Mozambique," Ritchie said.