Glencore and Sumitomo buy Rio’s Clermont coal mine stake for $1bn

City A.M. Reporter
RIO Tinto has agreed to sell its majority stake in Australia’s third-largest thermal coal mine to Glencore Xstrata and Japan’s Sumitomo Corporation for just over $1bn (£618m), pushing ahead with plans to focus on larger, core operations.

Rio put its 50.1 per cent stake in the Clermont mine in Queensland on the block earlier this year, but appetite had been considered by industry advisers to be weak, given a poor outlook for coal prices and high costs in Australia.

The sale – for $1.05bn in cash – will be a welcome boost for Rio’s plan to sell down unwanted assets, as the world’s third-largest miner pares debts of $22bn, cuts costs and tries to meet shareholder demands for better returns.

Rio said on Friday it had announced or completed almost $3bn of divestments this year, but its larger planned sales – including a stake in Canada’s largest iron ore producer – have struggled.

The deal will be financed by debt for around half the purchase price, meaning Glencore and partner Sumitomo will put in only just over $250m in cash each.