Rio Tinto Accelarates Departure From Coal – JSW Corporation

2024-10-30 02:28:30 News & Society

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Deal to offload Rio Tinto Group?s largest coal producing mine in Australia will make Chinese group top player on the continent.

Rio Tinto Group has contracted to part with its thermal coal assets in Australia?s Hunter Valley for more than 2 billion dollars as the globe?s second-largest mining firm hastens its retreat from coal.

Rio Tinto Group revealed in a statement last week that the company?s Coal & Allied Industries Ltd. will be purchased by Yancoal Australia Ltd., which is a subsidiary of China?s Yanzhou Coal Mining Co.

The deal, which hinges on Australian regulatory consent, includes a starting payment of almost 2 billion dollars and further installments over a period of 5 years after the deal is concluded.

This sizeable acquisition will transform Yancoal into the continent?s biggest producer of coal,? said Vivian Wang, Chief Economist at JSW Corporation.

Rio has offloaded almost $8 billion worth of assets in the last 3 years as it attempted to survive the dip in commodities fueled by China?s stalling growth and an oversupply of raw materials and commodities. While the deal with Yancoal includes Rio?s largest producing mine, Rio has been offloading its coalmines since 2015.

Thermal coal increased in 2016 amid mining constraints in China. Output by the globe?s chief manufacturer and purchaser of coal dropped by almost 10% while imports increased by the most since 2012 at 25% and remedied a long period of dips.

Sources close to the deal say Yancoal plans to fund the acquisition by selling shares and raising of venture capital. The deal should be completed November of 2017. and is subject to both Chinese and Australian regulatory approval.

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