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.
Business Insider Emails & Alerts
Site highlights each day to your inbox.