Rio Tinto's Board of Directors (BoD) reaffirms its recommendation to sell Coal & Allied, its Australian thermal coal mining assets to Yancoal Australia in detriment to Glencore, which recently rose its buying price from US$2.55bn to US$2.65bn on 23 June 2017.
Yancoal reacted and proposed better terms on 25 June, including a total consideration of US$2.69bn (of which US$2.45bn in upfront cash payment, US$240m via unconditional guaranteed royalties). Yancoal remains the preferred buyer and the transaction is expected to be completed in Q3 2017.
Coal & Allied operates multiple, multi-seam 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).
Yancoal Australia is a 78%-owned subsidiary of Chinese coal company Yanzhou Coal Mining, which already operates several coal mines across Australia as well, including in New South Wales, while Glencore operates 18 open-cut and underground coal mines in Australia, including coal mines near the Coal & Allied assets in New South Wales.
Interested in Global Energy Research?
Enerdata's premium online information service provides up-to-date market reports on 110+ countries. The reports include valuable market data and analysis as well as a daily newsfeed, curated by our energy analysts, on the oil, gas, coal and power markets.
This user-friendly tool gives you the essentials about the domestic markets of your concern, including market structure, organisation, actors, projects and business perspectives.