By DALE BENTON. March 20, 2018, 9:24 a.m. Rio Tinto sells projects from Hail Creek and Valeria to Glencore for $ 1.7 billion
By DALE BENTON. March 20, 2018, 9:24 a.m.
One of the world's leading mining operators agreed to sell two of its main assets, in an agreement worth $ 1.7 billion.
Rio Tinto has reached an agreement with Glencore for the sale of all its holdings in the Hail Creek coal mine and the Valeria coal development project in Queensland, Australia, in a deal worth $ 1,700 million.
Through the sale, Glencore will receive 82% of Rio Tinto's stake in the Hail Creek operating mine, as well as its 71.2% stake in the Valeria project.
The agreement comes at a time when the company also announced a new and important debt reduction program, through a plan to purchase and exchange bonds for up to $ 3.5 billion.
The program is part of the ongoing capital management plan of the Rio Tinto Group and follows the successful completion of a series of dollar-denominated banknote rescues and repurchases worth $ 10 billion in 2016 and 2017.
Rio Tinto CEO JS Jacques said: "The sale of Hail Creek and Valeria offers convincing value to our shareholders and continues our strategy of strengthening our portfolio, focusing on the highest yields, maintaining a solid balance sheet and allocating capital to the opportunities of greater value.
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"We hope that Hail Creek will continue to operate under its new owner, securing long-term employment and continuing its contribution to the State of Queensland."
The Hail Creek complex is located in the northern Bowen basin, 120 km southwest of Mackay, in central Queensland, and comprises the homes of Hail Creek, Lake Elphinstone and Mount Robert. Hail Creek is a large-scale open-pit mining operation that began production in 2003.
Last year, the Hail Creek mine produced 9.4 million tons of sellable coal, comprising 5.25 million tons of hard coking coal and 4.13 million tons of thermal coal.
Valeria is a large undeveloped coal project located in the central Bowen Basin, approximately 40 km northwest of Emerald. Valeria's homes contain 762 million tons of coal mineral resources.
Once developed, Valeria is expected to produce high-energy products, thermal coal and low ash coking coal.