Rio Tinto has reached a binding agreement with MACH Energy Australia for the sale of its Mount Pleasant thermal coal assets US$224 million plus royalties.
With the recently announced binding agreement for the sale of Rio Tinto’s interest in the neighbouring Bengalla coal Joint Venture for $606 million to New Hope Corporation, this amounts to $830 million of agreed sales.
Mount Pleasant is a large-scale, thermal coal asset in the Hunter Valley of New South Wales with total marketable reserves of 474 Mt.
“These agreements for over $800 million in asset sales deliver significant value for our shareholders, with the potential for future royalties from Mount Pleasant,” says Rio Tinto Copper & Coal chief executive Jean-Sébastien Jacques.
“We believe Mount Pleasant can have a very positive future under its new owners with different priorities for development and capital allocation.”
Since January 2013, Rio Tinto has now announced or completed US$4.7 billion of divestments.
The sale is subject to certain conditions precedent being met, including completion of the restructure of Coal & Allied and regulatory approvals, and is expected to close in the second quarter of 2016.
Rio Tinto coal asset breakdown
Rio Tinto manages Coal & Allied's coal operations, which are located in the Hunter Valley region of New South Wales, Australia. The operations include Mount Thorley Warkworth, Hunter Valley Operations and Bengalla.
Rio Tinto recently reached a binding agreement for the sale of Coal & Allied’s 40% interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation Limited for $606 million.
Hunter Valley Operations and Mount Thorley Warkworth are multi-seam, multi-pit, open-cut mining operations that produced 5.2 Mt of semi-soft coking coal and 19.5 Mt of thermal coal in 2015.