Rio to sell majority stake of Clermont coal mine

Rio has agreed to sell off more than 50 per cent of its interest in Clermont to GlencoreXstrata for more than $1 billion.

The mine was originally put up for sale in April this year, as Rio looked to offload a number of its coal assets.

Sam Walsh, who took over as Rio’s chief in January, is said to be moving quickly in a bid to improve returns for investors. The company flagged they will improve shareholder value by selling weak assets.

However despite the mine's relatively new status, opening only in 2010, it had not received a solid offer, and as recently as the beginning of this month was still fielding lowball offers of less than $850 million.

The offers were reportedly made by Indian miner Andani, Dutch trading house Trafigura and Australian coal mining company New Hope Corporation.

Now GlencoreXstrata, through its jointly owned subsidiary GS Coal, has purchased Rio Tinto's 50.1 per cent interest in Clermont for US$1.015 billion.

RioTinto chief financial officer Chris Lynch said "the sale of Clermont Mine will allow us to realise value for our shareholders as we continue optimising our portfolio. It also demonstrates our focus on strengthening our balance sheet and taking a disciplined approach to allocating capital across the Group."Rio Tinto remains committed to a long-term future in central Queensland. Production has recently commenced from the US$2 billion extension of the Kestrel Mine and studies are currently underway to extend production from the Hail Creek Mine. 

"We expect the Clermont Mine will continue to perform strongly under its new ownership and make an ongoing contribution as a member of the local community. We will maintain high safety and environmental standards at Clermont Mine, through the transition period to the new manager."

This latest sale takes the value of Rio Tinto's total offloaded assets to US$2.915 billion.

The sale is expected to close in the first quarter of next year.

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