Coal news and updates

Rio Tinto to sell Mount Pleasant coal assets for over $224 mn

Rio Tinto has reached a binding agreement for the sale of its Mount Pleasant thermal coal assets to MACH Energy Australia Pty Ltd for $224 million plus royalties, a company statement said on January 27.

This follows the recently announced binding agreement for the sale of Rio Tinto’s interest in the neighbouring Bengalla coal Joint Venture. Together, these two deals amount to $830 million of agreed sales, the statement said.

Commenting on the deal, Rio Tinto Copper & Coal chief executive Jean-Sébastien Jacques said, “These agreements for over $800 million in asset sales deliver significant value for our shareholders, with the potential for future royalties from Mount Pleasant. We believe Mount Pleasant can have a very positive future under its new owners with different priorities for development and capital allocation.”

Rio Tinto has now announced or completed $4.7 billion of divestments since January 2013.

Mount Pleasant is a large-scale, thermal coal asset in the Hunter Valley of New South Wales with total marketable reserves of 474 million tons.

The sale is subject to certain conditions precedent being met, including completion of the restructure of Coal & Allied and regulatory approvals, and is expected to close in the second quarter of 2016.

Rio Tinto manages Coal & Allied's coal operations, which are located in the Hunter Valley region of New South Wales, Australia. The operations include Mount Thorley Warkworth, Hunter Valley Operations and Bengalla.

Rio Tinto recently reached a binding agreement for the sale of Coal & Allied’s 40% interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation Limited for $606 million. Hunter Valley Operations and Mount Thorley Warkworth are multi-seam, multi-pit, open-cut mining operations that produced 5.2 mt of semi-soft coking coal and 19.5 mt of thermal coal in 2015.

Source: ICMW