Mining giant Rio Tinto (ASX, LON:RIO) has agreed to sell its 75% stake in a Queensland project to Australia’s Whitehaven Coal (ASX:WHC) in a deal worth $200 million.
The sale would be the second one this week, and in line with Rio’s strategic decision to exit coal to focus on iron ore, copper and aluminum.
The company noted it was in the process of offloading its remaining Australian coal asset — a stake in the Kestrel underground mine.
“We believe this agreement for the sale of Winchester South represents the best option for the future development of the project while delivering attractive value for Rio Tinto,” chief executive Jean-Sebastien Jacques said in the statement.
The transaction, subject to Australian regulatory approvals, is expected to close in the second quarter of the year.
Winchester South is a large, undeveloped coal project located in the northern Bowen Basin, roughly 30km south-east of the Moranbah township. It holds 356 million tonnes of coking and thermal coal mineral resources.
According to Whitehaven, the project has the potential for an open cut mine life of 20-30 years with significant exploration potential, ROM coal production of 7.5 million to 15 million tonnes annually and product coal in the range of 3.5 million-7.5 million tonnes a year.