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New UserGlencore on track to meet debt targets after selling Australian coal railway for £711m
20 Oct 2016
Mining giant Glencore is a further stop on the road to hitting its debt targets after banking £711m from the sale of a coal haulage railway in Australia.
The Swiss-based miner and commodity trader has sold its Glencore Rail (GRail) business to Genesee & Wyoming Australia for A$1.14bn. The sale had been widely trailed, although it fell marginally short of expectations.
Under the deal, GWA will service Glencore’s coal transport requirements in Australia’s Hunter Valley for 20 years. GRail hauls around 40m tonnes a year of Glencore’s coal production in the region to the Port of Newcastle.
Glencore is targeting $4-5bn (£3.2-4bn) of asset disposals by the end of 2016 as it looks to pay down its massive debt pile.
The GRail sales takes this tally to around $4.8bn, putting it on track to hit net debt of $16.5-17.5bn by the end of the year.
The FTSE 100 mining group, led by chief executive Ivan Glasenberg, has become a zealous convert to the cause of cutting debt, after investors raised concerns last year that its borrowings were perilously high, at $30bn.
Source:Telegraph.co.uk