Log in or Register for enhanced features | Forgotten Password?
White Papers | Suppliers | Events | Report Store | Companies | Dining Club | Videos

Mining & Commodities
Coal
Return to: EBR Home | Mining & Commodities | Coal

Rio Tinto to sell Kestrel underground coal mine in Australia for $2.25bn

EBR Staff Writer Published 28 March 2018

Rio Tinto has agreed to divest Kestrel coal mine in central Queensland, Australia to private equity firm EMR Capital and Indonesia’s coal producer PT Adaro Energy, for $2.25bn.

Under the terms of the binding agreement, Rio Tinto will sell its entire 80% interest in the Kestrel underground coal mine located in the Bowen Basin, which is claimed to be the world’s premier metallurgical coal region.

The sale brings the total amount from the recent divestments of the company’s coal assets in Queensland to $4.15bn, Rio Tinto said.

The Kestrel underground mine, which produces coking and thermal coal for export, is the company’s last coal asset in the country.

EMR CEO Jason Chang said: “We are pleased to announce this milestone transaction which represents a once in a generation opportunity and I am excited about the expertise which both EMR and Adaro can bring to these operations.

“Coking coal is one of our four core commodities and it offers excellent demand and supply fundamentals for decades into the future.”

Rio Tinto said it plans to use the sales’ proceeds for general corporate purposes. Upon completion of the deal, EMR and Adaro will jointly manage and operate the Kestrel mine.

Adaro CEO Garibaldi Thohir said: “The acquisition of the Kestrel mine is a significant milestone in Adaro’s strategic expansion of its portfolio of metallurgical coal as well as one of its largest investments outside of Indonesia.

“We are thrilled at the growth which this transaction will bring, and look forward to working closely with EMR in making this venture a resounding success.”

Last year, the mine has produced 5.1 million tons (mt) of saleable coal, comprising 4.25mt of hard coking coal and 0.84mt of thermal coal. It had marketable reserves of 146mt and resources of 241mt as of 31 December 2017.

The transaction, which is subject to all regulatory approvals and other conditions, is planned to be completed in the second half of 2018.


Image: Rio Tinto’s Kestrel coal mine in central Queensland. Photo: Copyright © 2017 Rio Tinto.