Spokesmen for both Rio Tinto and Glencore would not confirm or deny to ICN that the discussions are taking place but either a complete sale of Rio Tinto’s Hunter Valley coal operations or some sort of joint venture arrangement to utilise shared infrastructure is considered strategical for the NSW coal industry.

Rio Tinto chief financial officer Chris Lynch also told analysts that Rio Tinto would not exclude joint ventures around existing assets provided there was opportunity to get benefits of scale, according to the UBS report by analyst Glen Lawcock.

“On the coal business, Lynch said they were being run for cash at the moment,” Lawcock’s report states.

“He said management and the board are fundamentally holding coal in the portfolio, but it is hard in the current environment for coal to compete for capital against the many other projects that are vying for capital.”