Rio Tinto has sold its 40% interest in the Bengalla coal joint venture in the Hunter Valley to New Hope for $866 million.
Bengalla is the smallest of three coal mines in the Hunter Valley of New South Wales in which Rio Tinto holds an interest, producing 8.6 million tonnes of coal in 2014, equating to 3.4 million tonnes for Rio Tinto based on its share.
The Anglo-American mega miners has now announced or completed US$4.5 billion of divestments since January 2013, with the agreed sale of its interest in Bengalla.
“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,” Rio Tinto chief executive of copper and coal Jean-Sébastien Jacques said.
“It demonstrates our commitment to further strengthening our balance sheet, maintaining a disciplined approach to allocating capital across the Group and delivering strong returns for shareholders through the cycle.
“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.
“We expect the business to make a significant and ongoing contribution to the New South Wales economy. Rio Tinto will ensure high safety and environmental standards are maintained through the transition to the new owners.”
Rio and joint venture partner Mitsubishi have also agreed to a simplification of the ownership structure of Coal & Allied, to help enable this transaction.
Under the agreement, Rio will assume 100% ownership of Coal & Allied, while Mitsubishi will move from holding 20% of Coal & Allied to holding a direct 32.4% stake in the Hunter Valley Operations mine.
The transactions are subject to certain conditions precedent being met, including the pre-emption rights of the Bengalla joint venture partners, Rio said this morning.
The Bengalla sale is expected to close in the first quarter of 2016.