Rio opens books to possible suitors for Australia coal mines

FE Team | Published: October 20, 2017 22:33:45

A sign adorns the building where mining company Rio Tinto has their office in Perth, Western Australia. — Reuters

SYDNEY, Oct 20 (Reuters): Global miner Rio Tinto has opened its books to more than a half-dozen potential buyers of its remaining two Australian coal mines as it winds down the sales process, two people familiar with the sale process said on Friday.
The Kestrel and Hail Creek coking coal mines on the block have attracted some of Australia's established coal miners, as well as private equity firms attracted to the positive outlook for selling metallurgical coal to Asian steel mills at robust prices, according to the people.
The mines could fetch around $2.0 billion, the sources said, in a sale that if successful would complete Rio's plan to finalize its exit from the sector and focus on iron ore, copper and aluminum, where it maintains greater market share. Credit Suisse is advising Rio on the sale.
Rio this year sold its Coal & Allied mining division to Yancoal Australia for $2.69 billion, and before that its 40 per cent interest in the Bengalla coal mine to New Hope Corp Ltd for $616.7 million.
Whitehaven Coal, South32 and possibly Anglo American, are among the interested parties, according to one of the people familiar with the process. Both sources spoke on condition of anonymity due to the sensitive nature of the process.
South32 in an email to Reuters declined to comment beyond saying the company continued "to focus on identifying new opportunities outside our portfolio to compete for capital".
Rio and Anglo American declined to comment. Whitehaven did not immediately respond to telephone and email requests for comment.
People familiar with the matter previously told Reuters investors including buyout firm Apollo and pension fund Canada Pension Plan (CPP) are among the bidders for the mines.
Parties have been invited to submit tentative offers by Dec. 8.