MINES

Kestrel on the chopping block

RIO Tinto’s Kestrel longwall mine and Hail Creek open cut mine in Queensland are for sale and could fetch up to $2 billion each for the company, which is exiting the coal business.

Lou Caruana
Kestrel on the chopping block

Due diligence on the company’s last remaining coal assets are being carried out in the sale process, which is being run by Credit Suisse, sources told Australia’s Mining Monthly.     

The company is believed to be keen to capitalise on the high metallurgical coal prices experienced after Tropical Cyclone Debbie by making a quick sale.

A source told Reuters: "There's a lot of interest in a limited number of opportunities in Australian coking coal and that's driving the frenzy for Hail Creek and Kestrel".

Rio Tinto’s hard coking coal production in the March quarter of 1.5 million tonnes was 20% below the first quarter of 2016 due to the timing of the longwall changeover at Kestrel as well as processing rates at Hail Creek.

In January, the company announced it would sell its Coal & Allied thermal coal division in New South Wales to Yancoal Australia for US$2.45 billion. This was approved by the Foreign Investment Review Board last month.

Coal & Allied owned an interest in the Hunter Valley Operations mine and the Mount Thorley Warkworth  mines together with associated assets in the Hunter Valley.

 

Rio Tinto told Australia’s Mining Monthly: “Rio Tinto does not comment on market speculation.”

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