Mining company Rio Tinto has surprised the coal industry by selling off over half of its interest in Clermont coal mine in Queensland.
GlencoreXstrata are the new partners, who have paid around $1 billion plus for a slice of the coal mining action.
The Clermont mine is located 12 km north west of† the Clermont in central Queensland. The deposit holds 177 million tonnes of thermal coal, with a mine life expectancy of 17 years.
In a strategic move to improve returns for investors, Rio Tinto’s Sam Walsh, is reportedly moving quickly to improve shareholder value by selling its low performing assets. RioTinto chief financial officer Chris Lynch also indicated that the sale of Clermont Mine will allow Rio Tinto to realise value for our shareholders as they continue optimising their portfolio.
Which means Rio are on a trimming costs and liabilities exercise to win over investors as well as appease everyone who has a vested interest in seeing the company perform, increase profits and pay dividends.
Rio Tinto still remains a force in Queensland coal mining
Rio Tinto remains committed to a long-term future in central Queensland. Production has recently commenced from the US$2 billion extension of the Kestrel Mine and studies are currently underway to extend production from the Hail Creek Mine.
The Rio Tinto saviour, came in the shape of GlencoreXstrata, through its jointly owned subsidiary GS Coal, who have purchased Rio Tinto’s 50.1 per cent interest in Clermont for US$1.015 billion. The final sale is expected to be finalised in the first quarter of 2014.
GlencoreXstrata mining facts
For mining giant GlencoreXstrata, it means it can boast marketing rights to 12 million tonnes of high-quality thermal coal for a relatively small investment.The sale will boost GlencoreXstrata’s thermal coal trading volumes by 15 per cent.
Glencore will operate the mine, despite having only a 20.05 per cent stake will market all of its coal extracted from the mine.
Reference: Rio Tinto sells its stake in Clermont coal mine