Rio Tinto sells its Blair Athol coal mine for less than a bus ticket
Rio Tinto (ASX, LON:RIO) is selling its interest in Blair Athol coal mine to a small Australian miner for just US$0.75 (A$1), as part of the world’s second largest miner’s strategy to offload unprofitable assets and focus mostly on copper, a plan being carried out by the firm’s brand-new CEO, Jean-Sébastien Jacques.
Buyer TerraCom (ASX: TER) said that as part of the deal it would also receive about $60 million (A$80 million) from Rio Tinto to meet rehabilitation costs at the site.
The planned sale follows the Anglo-Australian miner’s decision to donate its stake in a Papua New Guinea copper mine last week.
It also comes exactly a year after Stanmore Coal paid Vale (NYSE:VALE) and Sumitomo Corp A$1 for the Issac Plains coking coal mine, located about 100 km (62 miles) from Blair Athol.
Coal mines have fallen out of grace after years of low coal prices. The commodity has dropped from a peak of about $180 per tonne in 2008 to just over $50 due to a supply glut caused by overproduction and a sharp fall in Chinese demand.
In April, another top miner — Anglo American (LON:AAL) — sold its 70% stake in the Foxleigh coking coal mine for an undisclosed sum to Taurus Funds Management and is currently trying to offload its other Australian coal mines.
The Blair Athol coal operation, which was closed in 2012, is one of the oldest in Queensland.
TerraCom, a subsidiary of Orion Mining Pty Ltd, said it plans to restart the mine before the end of the year.