Rio Tinto has completed the divestment of the Coal & Allied operations (Australia) for US$2.69bn, of which US$2.45bn in cash and a further US$240m of unconditional guaranteed royalty payments. The initial sales agreement with Yancoal Australia on the sale of Coal & Allied was reached in January 2017 for US$2.45bn and the transaction was approved by the Australian Foreign Investment Review Board (FIRB) in April 2017. However, the Swiss commodities group Glencore outbid Yancoal in June 2017 with a US$2.55bn offer, prompting Yancoal to bid US$2.69bn for Coal & Allied (of which US$2.45bn in upfront cash payment). Rio Tinto denied the offer and confirmed Yancoal Australia was its preferred bidder. In July 2017, the bidding war came to an end and Yancoal Australia, subsidiary of Yanzhou Coal Mining, has agreed to sell a 16.6% stake in the Hunter Valley Operations (HVO) in Australia to Glencore for $429m.
Coal & Allied operates multiple, multi-seam thermal coal open cut mines in the Hunter Valley region of New South Wales. It holds a 67.6% stake in the Hunter Valley Operations mine, an 80% interest in the Mount Thorley mine, a 55.6% interest in the Warkworth mine, a 36.5% interest in Port Waratah Coal Services (which owns a coal export terminal located at the Port of Newcastle) and other undeveloped coal assets. The Hunter Valley Operations and Mount Thorley Warkworth mines together produced 25.9 Mt of saleable thermal and semi-soft coking coal in 2016 (17.1 Mt Rio Tinto share).
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