Rio Tinto sells NSW mine amid plans for coal divestment

• 9 years ago (2015-10-01)

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The $606 million sale to New Hope – an Australian specialist coal-mining company – will pave the way for further divestments of Rio’s coal operations in New South Wales, estimated to be worth between $3 billion and $4 billion.

In addition to the sale of Bengalia, Rio has also announced the acquisition of Mitsubishi Development’s 20 per cent stake in Coal & Allied – one of Rio’s main Australian businesses – with the understanding that this restricting of ownership will make the business easier to sell.

Rio has said that it will sell its coal assets at the right price – and they are known to be in talks with X2 Resources, an investment company.

Daniel Morgan, UBS commodities analyst, said: “This looks like Rio is preparing to exit the coal industry. It could also be a signal that asset sales in the depressed coal sector are finally beginning to happen.”

Slowing growth in China and turmoil in commodities markets have derailed the decade-long boom in coal-mining, leaving New Hope as only one of a handful of cash-rich coal miners that are betting that this is a cyclical rather than structural downturn.

Bengalia has completed $4.5 Billion of divestments since January 2013.