The major mining house said it would receive at least $471 million from the initial public offering of the United States’ third-largest coal producer.

 

Rio will net $434 million from the float and a further $307 million as a cash distribution from Cloud Peak’s $600 million debt offering.

 

The Cloud Peak IPO was priced at $15 to raise $459 million, down from market expectations that each share in the float would be priced between $16 and $18.

 

The float plus the sale of the Jacob’s Ranch coal project to Arch Coal earlier this year should net Rio $1.5 billion in profit before tax, according to Rio’s chief financial officer, Guy Elliott.

 

Overall, Rio has sold $8.3 billion worth of assets around the world as part of a major divestment program announced in 2008.

 

These sales include its US coal assets, South American iron ore and potash mines, and the packaging assets of aluminium company Alcan, which Rio bought out in 2007.

 

Cloud Peak is headquartered in Wyoming and operates three surface coal mines in the Powder River Basin, including the Antelope and Cordero Rojo mines in Wyoming and the Spring Creek mine in Montana.

 

Rio will retain around 48% of Cloud Peak after the listing although it could reduce its shareholding down the track.

 

Shares in Cloud Peak listed on the NYSE on Friday.

 

Meanwhile, Rio Tinto last traded at $A72.58 on the Australian Securities Exchange, up $1.36 this morning.