Rio Tinto To Sell Coal Stake In Australia To New Hope For US$606 Mln

(RTTNews) - Miner Rio Tinto Plc. (RTPPF.PK, RIO.L, RIO, RTNTF.PK) said that it has reached a binding agreement for the sale of its 40 per cent interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation Limited (NHC.AX , NHPEF.PK) for US$606 million.

Bengalla is the smallest of three coal mines in the Hunter Valley of New South Wales in which Rio Tinto holds an interest, producing 8.6 million tonnes (3.4 million tonnes based on a 40 per cent Rio Tinto share) in 2014.

Rio Tinto noted that it has now announced or completed US$4.5 billion of divestments since January 2013, with the agreed sale of its interest in the Bengalla Joint Venture.

Rio Tinto and Mitsubishi Development have recently agreed a simplification to the ownership structure of Coal & Allied which helps enable this transaction. Under the agreement, Rio Tinto will assume 100 per cent ownership of Coal & Allied. Mitsubishi Development will move from holding a 20 per cent stake in Coal & Allied to holding a direct 32.4 per cent stake in the Hunter Valley Operations mine.

Subsequent to the completion of this transaction, Rio Tinto as a 100 per cent owner of Coal & Allied will receive all consideration set out above associated with the sale of Rio Tinto's interest in the Bengalla Joint Venture; hold a 67.6 per cent interest with management rights in the Hunter Valley Operations mine; hold interests of 80 per cent and 55.6 per cent respectively, with management rights, in the integrated Mount Thorley and Warkworth operations; and hold a 100 per cent interest in the Mount Pleasant project.

The transactions are subject to certain conditions precedent being met, including the pre-emption rights of the Bengalla Joint Venture partners.

The sale of the interest in the Bengalla Joint Venture is expected to close in the first quarter of 2016.