New York, United States, — 27 June 2013 – Anglo-Australian mining group Rio Tinto is considering the total or partial sale of its operations at the Benga coal mine, in Mozambique and is looking for a financial consultant to support and facilitate the process.
Citing unnamed sources, “The Wall Street Journal” reported that the company had launched a “tender amongst several investment banks,” trying to find a solution for the “troubled coal unit”, located in the Tete province of central Mozambique.
“Rio Tinto is trying to boost its balance sheet by selling a number of non-core businesses and under-performing assets,” the newspaper said. The news coincided with a halt to coal exports from Mozambique due to safety and security problems.
In 2012, Rio Tinto Coal Mozambique posted losses of over US$3 billion following a downward review of coal reserves at the Benga mine, in Tete, along with difficulties in transporting the coal away from the mine. The company bought the Benga mine in 2011 from Riversdale Mining for US$3.7 billion.
Now, and according to the Wall Street Journal, the multinational company may net US$700 million if it decides to sell the entire unit, or it may look for a partner to buy part of the project and share expenses.
Source: The Wall Street Journal. For more information, click here.