Rio Tinto has offloaded its stake in a NSW coal mine for $865 million

Picture: China Photos/Getty Images

Rio Tinto has sold its 40% stake in Bengalla, a Hunter Valley coal mine, for $865 million to the New Hope Corporation.

The sales brings Rio’s total assets sales to $US4.5 billion since January 2013, part of its strategy to strengthen its balance sheet in a low commodity price world.

The big miner has been cutting costs, increasing ore output, pulling back on capital spending and cutting debt.

Jean-Sébastien Jacques, Rio’s copper and coal chief executive, says the sale demonstrates commitment to further strengthening the company’s balance sheet.

“Bengalla mine is a robust, well-managed business with a productive work force and we believe it will have a positive future under the new owner with different capital allocation priorities,” he says.

The Bengalla mine is a large-scale open cut mine near Muswellbrook producing about 8.6 million tonnes a year of high quality thermal coal.

Shane Stephan, New Hope’s managing director, says the Bengalla mine is competitively positioned on the global export thermal coal cost curve and has a 25-year permitted mine life.

“This offer demonstrates New Hope’s positive long term outlook for the global export thermal coal market driven by increasing demand across Asia,” he says.

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