Rio Tinto has received more than 50 expressions of interest for its Queensland coking coal assets worth over $2 billion, which is part of the Anglo-Australian mining giant's plan to divest assets worth $8 billion, The Weekend Australian newspaper reported.
The London-based miner has hired Credit Suisse to handle the sale of the Kestrel and Hail Creek mines in Queensland, the report said.
Coking coal, used in steel making, has recently seen prices soar by 25 per cent and premium coking coal rose as high as $300 a tonne last month from about $160/tonne in February, the report added.
Potential bidders for the Kestrel and Hail Creek mines would be small Australian coal miners, as well as private equity firm Apollo, Xcoal, BHP Billiton with its joint venture partner Mitsubishi, Glencore and Coronado Coal.
The sale will see Rio Tinto exiting from Australian coal mining after it agreed to sell its Coal & Allied thermal coal unit in January to China's Yancoal Australia for $2.45 billion. (See: Rio Tinto to sell Coal & Allied to China's Yancoal Australia for up to $2.45 bn)
Rio Tinto has announced or completed at least $7.7 billion of divestments since 2013. These transactions include the sale of its interests in the Clermont coal mine, the Bengalla coal mine and the Mount Pleasant coal project. In addition, the restructuring of ownership of the Coal & Allied assets was completed with its joint venture partner Mitsubishi Development Pty Ltd last year.
The Kestrel Mine is an underground operation located 40 kms north-east of Emerald in central Queensland, supplying world markets coking and thermal coal.
Rio Tinto Coal Australia manages the operation on behalf of the joint venture partners, Queensland Coal Pty Limited (80 per cent) and Mitsui Kestrel Coal Investment (20 per cent).
Kestrel Mine had coal reserves of 132 million tones and in 2015 the mine produced more than 4 million tonnes of coking and thermal coal, of which, Rio Tinto's share was 3.27 million tones.
Hail Creek Mine is located 120 kms south-west of Mackay in central Queensland and supplies international markets with hard coking and thermal coal.
Rio Tinto Coal Australia manages the operation on behalf of the joint venture partners, Queensland Coal Pty Ltd (82 per cent), Nippon Steel Australia Pty Ltd (8 per cent), Marubeni Coal Pty Ltd (6.67 per cent) and Sumisho Coal Development Pty Ltd (3.33 per cent).
In 2015 the mine produced 9.4 million tonnes of hard and thermal coal for export.
Hail Creek Mine has reserves of 127 million tonnes of hard and thermal coal, and in 2015 the mine produced 9.4 million tones, of which Rio Tinto share was 7.71 million tonnes.