The companies are reportedly discussing ways of sharing mine and infrastructure costs in the Hunter Valley, although this has not been confirmed.
Glencore Xstrata owns the Ravensworth, Mount Owen and Liddell coal operations in the Hunter Valley. Rio Tinto owns Coal & Allied, which has the Warkworth Mt Thorley complex in its stable.
“A sharing of infrastructure and some combination of operations would likely have significant merit given coal earnings are highly sensitive to any reduction in the unit cost base,” an analyst at Liberum Capital Ltd Ash Lazenby in London told Bloomberg.
Glencore acquired Xstrata Plc for $US29 billion last month, which included Xstrata’s coal mines in the Hunter, to its global commodities trading operations. An integration plan for Xstrata’s assets is expected to result in more than $500 million in cost savings.