https://www.miningweekly.com

New Hope buys Rio’s stake in Bengalla mine

New Hope buys Rio’s stake in Bengalla mine

Photo by Bloombeg

30th September 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

Font size: - +

PERTH (miningweekly.com) – Coal miner New Hope Corporation will buy Rio Tinto’s 40% interest in the Bengalla thermal coal mine, in New South Wales, for A$865-million.

Bengalla is the smallest of three coal mines in the Hunter Valley in which Rio holds an interest and produced some 8.6-million tonnes in 2014, of which Rio’s share equalled 3.4-million tonnes.

The mine’s development consent allows for production to increase to around 12-million tonnes a year.

New Hope MD Shane Stephan said the Bengalla mine was very competitively positioned on the global export thermal coal cost curve and had a 25-year permitted mine life at current production levels, underpinned by some 218-million tonnes of marketable coal.

“This offer demonstrates New Hope’s positive long-term outlook for the global export thermal coal market, driven by increasing demand across Asia,” he added.

Rio Tinto copper & coal CEO Jean-Sébastien Jacques said the sale of the company’s interest in Bengalla would deliver value for shareholders as the miner remained focused on continuing to develop the strongest core portfolio of assets in the mining industry.

“It demonstrates our commitment to further strengthening our balance sheet, maintaining a disciplined approach to allocating capital across the group and delivering strong returns for shareholders through the cycle.

“Bengalla mine is a robust, well-managed business with a productive workforce and we believe it will have a positive future under the new owner with different capital allocation priorities. We expect the business to make a significant and ongoing contribution to the New South Wales economy. Rio will ensure high safety and environmental standards are maintained through the transition to the new owners.”

The transaction was subject to a number of conditions, including that the remaining three participants in the Bengalla joint venture (JV) not exercise their preemptive rights under the JV agreement.

Following this deal, Rio has completed $4.5-billion of divestments since January 2013.

Its interest in the Bengalla mine, as well as The Mount Thorley Warkworth and Hunter Valley operations, were held by subsidiary Coal & Allied.

Rio and Mitsubishi Development recently agreed a simplification to the ownership structure of Coal & Allied, which has helped in enabling the divestment of Bengalla.

Under the agreement, Rio would assume full ownership of Coal & Allied, while Mitsubishi would move from holding a 20% stake in Coal & Allied to holding a direct 32.4% stake in the Hunter Valley Operations mine.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

SAIMC (Society for Automation, Instrumentation, Mechatronics and Control)
SAIMC (Society for Automation, Instrumentation, Mechatronics and Control)

Education: Consulting with member companies to obtain the optimal benefits from their B-BBEE spending, skills resources as well as B-BBEE points

VISIT SHOWROOM 
M and J Mining
M and J Mining

M and J Mining are leading suppliers of physical support systems as used by the underground mining industry. Our selection of products are not...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.112 0.147s - 90pq - 2rq
Subscribe Now