Wired News – Rio Tinto’s Stake in Hail Creek Coal Mine and Valeria Coal Project Acquired by Glencore

Stock Monitor: Denison Mines Post Earnings Reporting

LONDON, UK / ACCESSWIRE / March 22, 2018 / Active-Investors.com has just released a free research report on Rio Tinto PLC (NYSE: RIO). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=RIO as the Company’s latest news hit the wire. On March 20, 2018, the Company announced that it has signed an agreement with Glencore PLC to sell its interests in Hail Creek coal mine and the Valeria coal development project in Queensland, Australia. The all-cash deal is valued approximately $1.7 billion. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Rio Tinto most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

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Details of the Assets Sale

The assets sale to Glencore covers Rio Tinto’s 82% interests in the Hail Creek mine and 71.2% interest in Valeria coal development project. The remaining 18% interests in Hail Creek include Nippon Steel Australia Pty Ltd.’s 8%, Marubeni Coal Pty Ltd’s 6.67%, and Sumisho Coal Development Pty Ltd’s 3.33%. These companies have the option to sell their interests to Glencore and their combined interest is valued $340 million.

The transaction is expected to be completed by H2 2018 subject to receiving regulatory approvals from Australia’s Foreign Investment and Review Board, the Queensland Government and other antitrust regulators.

Rio Tinto plans to utilize the proceeds from the assets sale for general corporate purposes. The transaction will attract an estimated income tax of approximately $300 million. However, the exact figure will be based on the final proceeds from the assets sale and the total of capital gains and losses realized by the Rio Tinto in Australia as a Group as on December 31, 2018.

The transaction will expand Glencore’s existing coal business in Australia which includes 17 operational mines in Queensland and New South Wales with total production capacity of over 87 million tonnes of saleable coal in FY 2017.

Rationale for Divestment

Rio Tinto has been slowly exiting from the fossil fuel business across geographies to focus on more productive assets like iron ore and copper. The Company was on a lookout for potential buyers for its coal mines in Australia since the start of 2017. In September 2017 it had completed the sale of its wholly-owned subsidiary Coal & Allied Industries Limited to Yancoal Australia Limited for $2.69 billion. Glencore has first tried to acquire Coal & Allied from Rio Tinto but Yancoal’s proposal to acquire Coal & Allied was approved by Rio Tinto’s shareholders in June 2017 after determining that Yancoal’s offer was the superior one. Later Glencore acquired 49% interest in the Hunter Valley Operations coal mine in July 2017. Rio Tinto is now exploring options to sell its remaining coal assets in Australia.

About Divested Assets

The Hail Creek Coal Mine – Hail Creek is a large scale open cut mining operation in the northern Bowen Basin, 120 km south-west of Mackay, in central Queensland and comprises the Hail Creek, Lake Elphinstone, and Mount Robert tenements. Production for FY17 from Hail Creek mine was 9.4 million tonnes of saleable coal which included 5.25 million tonnes of hard coking coal and 4.13 million tonnes of thermal coal. Hail Creek mine has reported marketable reserves of 142 million tonnes and mineral resources of 601 million tonnes. The Lake Elphinstone and Mount Robert tenements together had mineral resources of 193 million tonnes. Hail Creek contributed a pre-tax profit of $357 million to Rio Tinto for FY 2017.

Valeria Coal Development Project – The Valeria thermal coal deposit is located 265 kilometers west of Rockhampton and 67 kilometers south-east of Glencore’s Clermont managed coal operation. The site has 762 million tonnes of coal mineral resources and is expected to produce high energy, low ash thermal and coking coal products once the mine is developed. The gross assets at Valeria are valued $859.1 million as on December 31, 2017.

About Glencore PLC

Baar, Switzerland-based Glencore is one of the world’s largest globally diversified natural resource companies. Glencore has four main business verticals – Metals and Minerals, Energy Products, Agricultural products, and marketing. The Company has over 150 mining and metallurgical sites, oil production assets and agricultural facilities. The Company has presence in over 50 countries and is supported by a global team of 146,000 employees and contractors.

About Rio Tinto PLC

London, UK-based Rio Tinto is a one of the largest global player in the mining and metals sector. The mining Group focuses on finding, mining, and processing the earth’s mineral resources. The Company owns and operates mines, mills, refineries, smelters and power stations, research and service facilities, to produce Aluminium and copper, diamonds, gold and industrial minerals, iron ore, coal and uranium and distributed across the world via its network of railways, ports and ships.

Rio Tinto’s substantial assets in Australia account for half of the Group’s global assets. The Company owns or has interests in Aluminium, Copper and Diamonds, Salt, uranium and coal, as well as iron mines in Australia and employs over 160,000 people in the country.

Stock Performance Snapshot

March 21, 2018 – At Wednesday’s closing bell, Rio Tinto’s stock advanced 3.02%, ending the trading session at $53.26.

Volume traded for the day: 3.82 million shares, which was above the 3-month average volume of 3.21 million shares.

Stock performance in the last three-month – up 6.78%; previous six-month period – up 9.93%; past twelve-month period – up 29.87%; and year-to-date – up 0.62%

After yesterday’s close, Rio Tinto’s market cap was at $95.31 billion.

Price to Earnings (P/E) ratio was at 10.40.

The stock has a dividend yield of 4.13%.

The stock is part of the Basic Materials sector, categorized under the Industrial Metals & Minerals industry. This sector was up 2.5% at the end of the session.

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