Apollo and CPP circling Kestrel

US PRIVATE equity group Apollo Global Management and pension fund Canada Pension Plan are in the hunt for Rio Tinto’s remaining Australian coal assets, including its Kestrel longwall mine and Hail Creek open cut mine which together could be sold for US$2 billion, according to a report by Reuters.
Apollo and CPP circling Kestrel Apollo and CPP circling Kestrel Apollo and CPP circling Kestrel Apollo and CPP circling Kestrel Apollo and CPP circling Kestrel

Rio Tinto's Kestrel longwall mine in Queensland.

Lou Caruana

Apollo and CPP have teamed up with US coal company Xcoal Energy & Resources and a former Glencore executive to bid for the assets, Reuters quotes sources as saying.

New South Wales based producer Whitehaven Coal is also an interested party in the sale process, which is being conducted by Credit Suisse.     

Reuters says Credit Suisse has nominated December 8 as a deadline for bids. 

The successful sale of Kestrel and Hail Creek would mark Rio Tinto’s withdrawal from Australian coal. It managed, eventually, to sell its Hunter Valley assets in New South Wales to Yancoal for $2.69 billion earlier this year.

Apollo had been keenly interested in acquiring Anglo American’s key coal assets at Moranbah North and  Grosvenor in Queensland but was thwarted when Anglo American CEO Mark Cutifani decided to hold on to the coal operations.

The Kestrel longwall mine, which has improved its productivity over the past three years, would be an attractive entry point for Apollo and the CPP into the Australian coal sector.