You are here

Rio completes Australia coal mines sale to China's Yancoal

[SYDNEY] Mining giant Rio Tinto has wrapped up the sale of most of its Australian coal assets to Yancoal, with the China-backed firm taking control of the business on Friday.

Rio, the world's second-largest miner, which is dual-listed in Britain and Australia, banked US$2.45 billion in cash with a further US$240 million due in royalty payments.

With its Coal & Allied operations transferring to Yancoal, Rio said its 2017 thermal coal production had been revised down to 13-14 million tonnes, from 17-18 million tonnes previously.

Yancoal, majority-controlled by China's Yanzhou Coal, was preferred despite a higher bid by Glencore.

Market voices on:

The Chinese company had already won approval from Australia's Foreign Investment Review Board, while the Swiss commodities giant still needed the regulatory green light.

Rio, which in February reported a surge in annual net profit thanks to improving commodity prices, is selling Coal & Allied in a divestment drive that analysts expect will lead to a complete exit from the coal sector.