Rio Tinto to exit coal mining business with sale of Kestrel coal mine for $2.25bn
Mining industry news : Rio Tinto is all set to exit from coal mining business by selling its 80% stake in the Kestrel coal mine in Queensland to a consortium of EMR Capital and Indonesian coal producer Adaro Energy, for a sum of $2.25 billion.
Rio Tinto’s Recent Deals to Exit Coal Mining Business in Australia
The underground Kestrel coal mine is the last coal asset of the Australian-British mining giant and its sale follows a series of divestitures of coal mines. These include two deals made in late Mach – a $200 million sale of its 75% stake in the Winchester South coal project, also in Queensland to Whitehaven Coal, and a $1.7 billion sale to divest the Hail Creek coal mine and the Valeria coal mine to Swiss natural resource company Glencore.
Kestrel Coal Mine Location
Located in the Bowen Basin, the Kestrel coal mine can be found 40km north-east of Emerald in central Queensland. Using the longwall mining method, the Kestrel coal mine produces coking and thermal coal products for export purposes.
The Kestrel coal mine production in 2017 was 5.1 million tonnes of saleable coal, made up of 4.25 million tonnes of hard coking coal while the remaining 0.84 million tonnes being thermal coal.
Kestrel coal mine, an underground coal mine in Queensland, Australia. Photo Copyright © 2017 Rio Tinto.
Rio Tinto had reported Kestrel coal mine’s marketable reserves to be 146 million tonnes and its marketable mineral resources to be 241 million tonnes, as on 31 December 2017.
J-S Jacques – CEO of Rio Tinto said: “The sale of Kestrel, together with the announced divestments of Hail Creek and our undeveloped coal projects, delivers exceptional value to our shareholders and will leave our portfolio stronger and more focused on delivering the highest returns through targeted allocation of capital.
“I would like to thank the many people at Rio Tinto and the communities where we operate, whose hard work and commitment has contributed to the success of the coal business over many years.”
After completion of the deal, Indonesian coal producer Adaro Energy and private equity manager EMR Capital will be joining Mitsui Kestrel Coal Investment, which holds 20% stake in the Kestrel coal mine.
Rio Tinto expects to complete the sale of its stake in the Kestrel coal mine during the second half of 2018 once it gets all regulatory approvals and satisfies all conditions.
With the sale of the Kestrel coal mine, the Australian-British mining giant will be taking its total amount raised from its recent divestments of its Queensland coal mines to $4.15 billion.