Rio Tinto To Sell Clermont Mine Stake To Glencore Xstrata JV For $1.02 Bln

(RTTNews) - Mining giant Rio Tinto Plc (RTPPF.PK, RIO.L, RIO, RTNTF.PK) Friday announced that it has signed a binding agreement to sell its 50.1 percent interest in Clermont Joint Venture to GS Coal Pty Ltd., for $1.015 billion.

GS Coal Pty is jointly owned by commodities trader and natural resources firm Glencore Xstrata Plc (GLCNF.PK, GLNCY.PK, GLEN.L) and Sumitomo Corp. (SSUMY). Sumitomo is a general trading company, headquartered in Tokyo, Japan.

Chris Lynch, chief financial officer of Rio Tinto said, "The sale of Clermont Mine will allow us to realise value for our shareholders as we continue optimising our portfolio. It also demonstrates our focus on strengthening our balance sheet and taking a disciplined approach to allocating capital across the Group."

It was in January 2007, that Rio Tinto Coal Australia announced the development of the $950 million, 190 million tonne thermal coal deposit in Clermont. Rio Tinto Coal Australia's joint venture partners in the open cut mine are Mitsubishi Development Pty Ltd., J-Power Australia Pty Ltd., and J.C.D Australia Pty Ltd.

Rio Tinto noted that the Clermont stake sale is subject to agreement with its joint venture partners. The sale is also conditional upon certain conditions precedent, including customary regulatory approvals.

Under the terms of the sale, Glencore Xstrata will take over management of Clermont Mine, a producer of thermal coal in central Queensland. The transaction is expected to close in the first quarter of 2014. In central Queensland, Rio Tinto has recently commenced production from the $2 billion extension of Kestrel Mine and studies are currently underway to extend production from Hail Creek Mine, the firm said.

With the agreed sale of Clermont Mine, Rio Tinto's currently announced or completed divestments total $2.915 billion in 2013. The deal includes a binding agreement for sale of its interest in Northparkes and recently completed sales of Palabora and Eagle.

Rio Tinto recently reported a one percent rise in its share of iron ore output for the third quarter, while production advanced 3 percent from the preceding second quarter. The miner also upped its full-year forecast for copper production.

In London, Rio Tinto shares are currently trading at 3,210.5 pence, down 24.5 pence or 0.76 percent.