Anglo-Australian mining giant Rio Tinto yesterday struck a deal to sell its 40-per cent stake in the Bengalla coal mine in Australia to New Hope Corp for $606 million, as part of its plan to sell coal assets in light of the continuing global slump in coal prices.
The sale of the Bengalla mine is an indication that Rio Tinto may eventually sell all its interests in coal operations in Hunter Valley, which could fetch the miner between $3 billion and $4 billion.
Bengalla thermal coal mine located in the Hunter Valley is one of the three coal mines in which Rio Tinto is a stakeholder. The other partners in Bengalla are Western Australian farmers' cooperative Wesfarmers with 40-per cent interest, Mitsui with 10 per cent and Taipower with 10 per cent.
The sale of Rio Tinto's stake in the Bengalla mine requires the approval from its partners, who hold pre-emptive rights in the event of a sale.
Bengalla open pit mine produces over seven million tonnes of high quality thermal coal for the export market to be used for electric power generation, mainly in Asian countries. The coal is loaded onto railway wagons and taken 115kms to the Port Waratah Coal Terminal at Newcastle for exporting overseas.
Bengalla had marketable reserves of 120 million tonnes as at 31 December 2013.