World’s third largest mining giant Rio Tinto moved ahead on selling its majority stake of Australia’s third-largest thermal coal mine to Glencore Xstrata and Japan’s Sumitomo Corporation.
It is to be noted that, this disinvestment by Rio will fetch USD 1.04 billion in its account.
Last year Rio Tinto owned 50.1% stake in the Queensland’s Clermont mine, but as the coal market dipped and Australian coal prices lowered along with higher operating cost, made the company inviable to operate. Rio Tinto is stepping ahead to trim its debt, and planning to sell down its unwanted assets to meet shareholders’ demand by cutting its costs.
It is noted that Rio Tinto has completed deprivation of around USD 3 billion this year including its other countries’ assets.
The biggest international thermal coal trader and producer Glencore Xtrata and Japan based leading group Sumitomo Corporation has taken a strategic step on buying, as Clermont is mostly open cast mine with low cost operation, also its waste ratio is relatively less and saleable coal without washing are 90%. It should be also noted that Glencore Xtrata and Sumitomo Corporation will only inject USD 250 million each, as the deal will be financed for half of the purchased price and it will control larger production of coal.
As reported by media, for the stake in Rio Tinto’s Clermont coal mine , world’s leading traders Trafigura and Adani Enterprices had bid below USD 850 million.
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