MELBOURNE – Rio Tinto Group, which agreed last month to sell $2.45-billion of Australian assets, has received approaches for its remaining coal operations in the country, people with knowledge of the matter said.
The London-based company is considering options for its Hail Creek and Kestrel mines, including a potential sale, according to the people, who asked not to be identified because the details are private. Its controlling stakes in the operations, which are located in Queensland state’s Bowen Basin and mainly produce coking coal used in steelmaking, could fetch as much A$2-billion ($1.5-billion), the people said.
Rio, the world’s second-biggest miner, has been divesting Australian coal assets since dismantling its energy division in 2015. The company is focusing on its most profitable and long-life operations in iron ore, copper and aluminum as China’s economy matures and growth cools, Chief Executive Officer Jean-Sebastien Jacques told investors at a London seminar in December.
The assets are Rio’s last producing coal mines globally after it agreed to sell its stakes in Australian thermal coal operations to an arm of China’s Yanzhou Coal Mining for $2.45-billion. A formal sale process for Hail Creek and Kestrel may not begin until Anglo American decides whether to sell its Australian coking coal mines, the people said.
Rio declined to comment in an e-mailed statement. The company said last month it has agreed or completed at least $7.7-billion of asset sales since 2013.
Anglo American rejected a bid from Apollo Global Management and Xcoal Energy & Resources for its Moranbah and Grosvenor mines in Australia as too low, people familiar with the matter said in November. Other potential suitors for those assets included BHP Billiton, Warburg Pincus-backed mining investor Anemka Resources, Coronado Coal and AMCI Capital, the people said at the time.
Rio owns 82% of Hail Creek and 80% of Kestrel, according to the company’s website. The two operations produced a combined ten-million metric tons of coking coal and 4.6-million tons of thermal coal last year, Rio said in a January 17 filing.