Glencore to offload second coal mine in Australia in less than three months
Miner and commodities trader Glencore (LON:GLEN) said Monday it has begun the sale process for a second Australian coal mine as it readies to pay up to $300 million for shares in Yancoal Australia, as part of a deal that allowed the firm to put its hands on Rio Tinto’s (ASX, LON:RIO) former coal assets in the Hunter Valley.
Rolleston mine produced 13.3 million tonnes of thermal coal last year, out of Glencore’s total Australian coal production of about 93 million tonnes.
The decision to sell Rolleston mine, made together with its Japanese joint venture partners — Itochu Corp and Sumitomo Corp —, is part of Glencore’s ongoing plan to optimize its portfolio and redeploy capital into other opportunities, it said in the statement.
The mine, which produced 13.3 million tonnes of thermal coal last year, out of Glencore’s total Australian coal production of about 93 million tonnes, is located far from the Swiss firm’s main collieries. That makes it less cost-effective than the other operations from a shipping standpoint.
This not the first coal mine Glencore puts up for sale in recent months. In May, it decided to offload its wholly-owned Tahmoor coking coal mine, also in Australia, saying it was planning on mining just thermal coal in the future.
Last month, in fact, the company was finally able to grab a stake in the coal mines that Yancoal Australia (ASX:YAL) is acquiring from Rio Tinto. The $1.1 billion deal gives Glencore almost half (49%) of those mines and will help Glencore add 7 million tonnes of thermal coal a year to its coal division.
Glencore owns 75% of the Rolleston open cut mine, located in Australia’s Bowen Basin in Queensland state, while its Japanese partners each have a 12.5% stake on it.
Merrill Lynch has been appointed as sole financial adviser on any deal, the company said.