Bengalla is the smallest of three coal mines in New South Wales’ Hunter Valley in which Rio Tinto holds an interest.
The mine produced 8.6 million tonnes of coal in 2014.
With the agreed sale of its Bengalla stake, Rio Tinto has announced or completed $US4.5 billion of divestments since January 2013.
Rio Tinto Copper & Coal chief executive Jean-Sebastien Jacques said the company remained focused on continuing to develop the strongest core portfolio of assets in the mining industry.
“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,” he said.
“We expect the business to make a significant and ongoing contribution to the NSW economy.
“Rio Tinto will ensure high safety and environmental standards are maintained through the transition to the new owners.”
Rio Tinto and Mitsubishi Development recently agreed a simplification to the ownership structure of Coal & Allied, which has helped this transaction go ahead.
Under the agreement Rio Tinto will assume 100% ownership of Coal & Allied. Mitsubishi Development will move from holding a 20% in Coal & Allied to holding a 32.4% stake in the Hunter Valley Operations mine.
Subsequent to the completion of the transaction Rio Tinto will:
- receive the full consideration for the sale of its interest in the Bengalla JV
- hold a 67.6% stake and management rights in the Hunter Valley Operations mind
- hold 80% and 55.6% interests respectively, with management rights, in the integrated Mount Thorley and Warworth operations
- hold a 100% interest in the Mount Pleasant operation.
The transactions are subject to certain conditions precedent being met, including the pre-emption rights of the Bengalla Joint Venture partners.
The sale of the interest in the Bengalla JV is expected to close in the first quarter of 2016.
The other partners in the JV are Wesfarmers Bengalla (40%), Taipower Bengalla (10%) and Mitsui Bengalla Investments (10%).
