Rio’s asset sale a blow for the Hunter

The Hunter Valley’s already struggling coal industry will again be hit if Rio Tinto goes ahead with apparent plans to sell off its stake in Coal & Allied.

The sale plans would affect three open-cut mines in the region including Hunter Valley Operations, Mount Thorley/Warkworth, and Bengalla.

Coal-loader operator Port Waratah Coal Services will also be affected by the sell down plans.

The four operations employ almost 3000 people.

Rio is yet to officially confirm the sale plan, but has repeatedly declined the chance stop speculation triggered late last week by the Wall Street Journal.

Rio spokesman Matthew Klar said the company’s only statement was that it ‘‘would not respond to market speculation’’.

According to the Wall Street Journal reports, Rio has appointed Deutsche Bank to help it sell a 29 per cent stake in C&A and offload two thermal coalmines in Queensland.

The deal is expected to raise up to $3billion for the company and is in line with newly appointed CEO Sam Walsh’s agenda to cut costs and offload underperforming assets.

Rio holds an 80 per cent stake in C&A, Mitsubishi has a 20 per cent share.

C&A owns all of Hunter Valley, 80 per cent of Mount Thorley/Warkworth and 40per cent of Bengalla.

C&A also has a 35 per cent share of Port Waratah Coal Services (PWCS), which operates loaders at Carrington and Kooragang Island and is behind the proposed T4 loader project, Newcastle Herald reports.

Two years ago C&A was valued at more than $10billion but since then coal prices have dropped by over a third and Rio may have to be prepared to take a loss on the sale.

Forestry, Mining and Energy Union district president Peter Jordan said he was not surprised by Rio’s silence.

‘‘Rio never like telling people what they are doing,’’ he said.

‘‘The feedback from our members has been that they’d be overjoyed if someone took the mines over from Rio,’’ Jordan said.

According to the Newcastle Herald Rio told contractors at its Hunter Valley mines to cut their prices by 20 per cent, as a result a number of contractors have been laid off.

There have also been reports that Rio will sell off its 80 per cent stake in Northparkes copper and gold mine.

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