Rio Tinto sold coal mines in Australia for US$2.91b

It sold its interest in the Hail Creek and Kestrel coal mines.

Metals and mining firm Rio Tinto sold completed the sale of its remaining coal assets in Queensland, Australia, for US$2.91b (A$3.95b).

According to an announcement, the company sold its interests in the Hail Creek coal mine and Valeria coal development project to Glencore for A$1.7b and its interest in the Kestrel underground coal mine to a consortium comprising private equity manager EMR Capital and PT Adaro Energy Tbk for A$2.25b.

To reflect the sale of these assets, 2018 production guidance is updated to 4 million tonnes of hard coking coal and 2.5 million tonnes of thermal coal. Estimated tax payable on the transactions is in the order of A$1b.

In a separate announcement, the company said it has approved A$146m funding to undertake initial work at the Koodaideri iron ore project in Western Australia, ahead of a final investment decision expected by the end of the year.

The funds will be invested in detailed engineering work on key elements of the project, the development of a rail construction camp and the first stage of the Koodaideri accommodation camp.

“Subject to final investment and government approvals, Koodaideri will be Rio Tinto’s first intelligent mine, incorporating the latest in high-tech advances in the industry and utilising an increased level of automation and robotics,” the company said.

If approved, construction is scheduled to begin in 2019 with first production expected in 2021. The mine would create over 2,000 jobs during construction and 600 permanent operational roles.