Rio Tinto sells South African coal assets to Canadian company
If you had any doubts over what mining giant Rio Tinto (ASX, LON:RIO) thinks about coal and small operations, today’s news should make it clear. The Anglo-Australian miner has agreed to sell two minor coal assets in South Africa to Canadian Forbes & Manhattan Coal for $53 million (440 million).
The news came only a day after reports of Rio cutting more coal mining jobs in Australia and a week after it announced cuts across its coal mines in Queensland as the state raised its royalty rates.
In a press release Toronto-based Forbes & Manhattan will pay a total of about $52.3 million plus royalties to the mining giant, including $37.7 million when the deal closes and two follow-up payments.
The Zululand mine and the Riversdale deposit are about 230 kilometres from Forbes Coal’s Aviemore operations.
Rio Tinto has agreed to sell Forbes 100% ownership of the shares and shareholder claims of Riversdale Mining Ltd. in Riversdale Holdings (Proprietary) Ltd. (RHPL).
The Canadian company aid the acquisition would boost its total coal production by 39% to 2.5-million tonnes a year.
In July this year a Rio Tinto spokesperson explained that a general review is underway and although the details are to be worked out, it would mean job loses.
Rio is also looking at selling some or all of its diamond mines, which currently include three operations: the 100%-owned Argyle in Australia, 60%-owned Diavik in northern Canada, and Murowa in Zimbabwe of which it has a 78% interest.
Rio Tinto operates a number coal mines in central Queensland, including Blair Athol near Clermont, and Kestrel near Emerald.
Other than a mine in Mozambique, Australia is the only country in the world where Rio Tinto operates coal mines.