Indonesia’s Adaro says Australia approves Kestrel coking coal mine deal

Kestrel mine. (Image: Rio Tinto)

JAKARTA, May 31 (Reuters) — Indonesian coal miner Adaro Energy said Australian authorities have approved its plan to acquire Rio Tinto’s stake in the Kestrel coking coal mine in the Australian state of Queensland, and the company expects to finalise financing for the deal on July 1.

Under the planned $2.25 billion transaction, Adaro will take a 48 percent stake of Rio’s current 80 percent interest in the mine, while its joint venture partner EMR Capital will take the remaining 52 percent, Adaro Chief Executive Garibaldi “Boy” Thohir said.

That transaction will be financed with bank loans and Adaro’s cash reserves, Thohir told reporters at a company event late on Wednesday.

Up to 40 percent of the capital requirement would be financed with internal cash reserves, Thohir added.

Adaro’s existing coal output was “still on the right track” for a target of between 55 million to 60 million tonnes this year, Thohir said.

Among its plans to diversify away from its thermal coal mining base, Adaro also hopes to become a “significant player” in the water business, Thohir said.

(Reporting by Cindy Silviana; Writing by Fergus Jensen; Editing by Christian Schmollinger)