Rio Tinto sells Australian coal mine Bengalla for $606m

 
Catherine Neilan
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Bengalla is the smallest of three coal mines in the Hunter Valley in which Rio Tinto holds an interest (Source: Getty)

Mining giant Rio Tinto is selling its stake in its Australian coal mine Bengalla for $606m (£399m).

The 40 per cent stake has been bought by specialist miner New Hope Corporation. Bengalla is the smallest of three coal mines in the Hunter Valley in which Rio Tinto holds an interest.

Deutsche Bank advised Rio on the deal.

It is one of a series of $4.5bn-worth of divestments made by the firm sine January 2013 as it looks to focus on more profitable commodities.

Rio Tinto Copper & Coal chief executive Jean-Sébastien Jacques said "This sale will deliver value for our shareholders as we remain focused on continuing to develop the strongest core portfolio of assets in the mining industry.

"It demonstrates our commitment to further strengthening our balance sheet, maintaining a disciplined approach to allocating capital across the Group and delivering strong returns for shareholders through the cycle.
"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. We expect the business to make a significant and ongoing contribution to the New South Wales economy. Rio Tinto will ensure high safety and environmental standards are maintained through the transition to the new owners."
The sale is expected to be completed in the first quarter of 2016.
It follows a recent agreement between Rio Tinto and Mitsubishi Development to simplify the ownership structure of Coal & Allied.
Under the agreement, Rio Tinto will assume 100 per cent ownership of Coal & Allied, while Mitsubishi Development will move from holding a 20 per cent stake in Coal & Allied to holding a direct 32.4 per cent stake in the Hunter Valley Operations mine.
This deal is subject to certain conditions, including the pre-emption rights of the Bengalla joint venture partners.