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The Hamilton family Steve Beale and Chris Dunphy, MIPEC Sgt Rob Smith and Constable Paul Muller Bhabie and Paul Dickens mine fifo Mitchell Brown and friends (L-R) Kaitlin Hodby, Leah Thorpe, Layne O'Brien, Brooke Hodby and Maddison Thorpe Greg Byrne, Downing; Ian Reed, QNP Sgt Rob Smith and Constable Paul Muller dragline Construction Aboutusgeneric_1 Jo-Anne Burke, DB Scaffolding; Susan McGuire, Mayogroup (L-R) Sharlani, Rhythm-Rayne, Eesiar and Khvalee'a.
The Hamilton family Steve Beale and Chris Dunphy, MIPEC Sgt Rob Smith and Constable Paul Muller Bhabie and Paul Dickens mine fifo Mitchell Brown and friends (L-R) Kaitlin Hodby, Leah Thorpe, Layne O'Brien, Brooke Hodby and Maddison Thorpe Greg Byrne, Downing; Ian Reed, QNP Sgt Rob Smith and Constable Paul Muller dragline Construction Aboutusgeneric_1

Rio sells out of coal
SALE sets up the Chinese to be the biggest coal employer in Australia
Wednesday 25 January 2017  

The Queensland-based Kestrel and Hail Creek coking coal mines will be the only coal businesses left on the books of Rio Tinto if a $3.2 billion bid for their NSW coal business by Yancoal is successful.

Yancoal, which ultimately is controlled by the Communist Chinese Government, already controls the Middlemount, Yarrabee and Cameby coal mines in Queensland, along with seven others in NSW.

If this transaction is successful, Yancoal's annual coal production will soar from around 16 million tonnes a year to more than 41 million tonnes - making it both the largest coal business and employer in the country.

Rio Tinto’s NSW Coal and Allied business is one of the world's largest thermal coal business, comprising the Hunter Valley Operations mine, the Mount Thorley mine, the Warkworth mine, and a 36.5 percent interest in a coal export terminal at Newcastle - all to be sold under the proposal.

However, the deal is highly conditional with Yancoal having options to abandon it if they cannot raise enough funds and investors to deliver on the bid.

Meanwhile, Rio Tinto cannot solicit other bids, although it can accept any unsolicited bids, providing they give Yancoal the full details, and the option to outbid them.

Yancoal chairman Xiyong Li said the mines were world-class, tier-one assets.

“This is a transformative and exciting acquisition for Yancoal shareholders and will form the basis for our future growth and success as Australia’s largest pure-play coal company,” he said.

“The new Yancoal will be very well positioned to realise significant value for our shareholders in the years ahead.”

Rio Tinto chief executive J-S Jacques said the sale reflects their desire to move away from thermal coal and is a good deal for investors.

“This sale delivers outstanding value for our shareholders and is consistent with our strategy of reshaping our portfolio to ensure the most effective use of capital,” he said.

Subject to all approvals and other conditions being satisfied, it’s expected the sale will be finalised in the second half of this year.

 

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