While chief financial officer Guy Elliott told an investor group recently that the IPO could be expected by the end of 2009, two anonymous sources told Bloomberg that Cloud Peak could offer $500 million in shares and $500 million in bonds.

The sale of Rio’s coal operations to another organisation in lieu of an IPO is still a possibility, the sources told the news service.

Cloud Peak – which is mostly comprised of Rio Tinto's western US coal assets – registered with the Securities and Exchange Commission to sell shares via an IPO in August.

Since 2007, Rio has announced $7 billion in asset sales to help repay debt from its purchase of Canadian aluminum producer Alcan, which it acquired in a $38.1 million deal. In June, it reported it would raise $21 billion through selling shares as well as the creation of an iron ore venture with BHP Billiton.

Rio spun off Cloud Peak in August 2008. The division controls four mines in Wyoming and Montana – Spring Creek, Cordero Rojo, Antelope and half of Decker – which produce thermal product from the Powder River Basin. The fifth operation, Jacobs Ranch, was sold to Arch Coal in March for $761 million.

According to Bloomberg, the four mines produced 97.1 million tonnes and had $1.24 billion in sales in 2008. The newswire also noted that Alpha Natural Resources was to purchase Cloud Peak in May 2009, but instead took over Maryland producer Foundation Coal.