logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Rio Tinto Close to Selling Blair Athol Coal Mine in Australia

By  +Follow October 2, 2013 10:23AM
Share:
Tickers Mentioned:

Diversified global miner Rio Tinto PLC (RIO) has been looking for ways to divest some less-profitable assets in 2013 as a means to cut into debt that mushroomed to nearly $19 billion in 2012.  Namely, Rio has been trying to sell an iron ore mine in Canada and its interest in coal mines in Australia and Mozambique as prices for coking, or metallurgical, coal have plunged in the past year and a half.

The plan to sell assets was put in motion by Sam Walsh after he assumed the role of chief executive in January as a means to improve profits by focusing on its bigger mines and return value to shareholders.  Walsh’s scheme involves the company cutting costs by $5 billion by the end of 2014.

In July, Rio sold its majority stake in the Northparkes copper mine in Australia to China Molybdenum Co. Ltd. for $820 million.

When prices for coking coal, which is heavily used in steel manufacturing, were soaring in 2011 to hit $330 per metric ton in the second quarter, demand was high in Europe and China.  Since then, coking coal prices have been more than halved on growth concerns, cutting into producers’ profits.

In April, The Australian reported that Rio was looking to sell its 50.1-percent stake in the Clermont coal mine for $1 billion and also looking to sell its neighboring Blair Athol coal mine in Queensland.  Rio was also reported to be looking to slash its 80-percent interest in Coal & Allied Industries Limited by 29 percent.  In November 2011, Rio and Japan’s Mitsubishi Development Pty Ltd. bought the 10.2-percent stake in Coal & Allied that they didn’t already own for $3.13 billion.

Finding buyers at the asking price has been a challenge for Rio, even though coal prices are trying to eke upward.  Japanese steelmaker Nippon Steel Y Sumitomo Metal Corp. recently set its fourth quarter contract price for prime hard grade coking coals with Australian miners at $152 per metric ton, up by $7 from the third quarter.  Conversely, some analysts argue that abundance in supply will drive prices lower going forward.

The Wall Street Journal reported three days ago that Rio has fielded a few offers to buy its majority stake in the Clermont mine from three bidders, India’s Adani Enterprises, Australia’s New Hope Corporation and Dutch trading house Trafigura, but the highest offer has been $850 million, well short of the $1-billion asking price.

Today WSJ says that Rio is close to selling the Blair Athol coal mine to Brisbane, Australia-based, diversified energy company Linc Energy, according to a source close to the matter.  Financial terms of the deal were not disclosed.  Shares of Linc, which trade on the Australian exchange under the ticker “LNC” fell about 10 percent in Wednesday trading.

Shares of Rio Tinto are trading marginally ahead Wednesday at $46.67, up 15 cents in early action.  Shares have far underperformed the main indices in 2013, down by about 12 percent since the start of January, but investors will be looking for final news of a deal as it represents another solid step in some restructuring that could improve future share value.

Results for RIO
miningman
19 Apr 14 21:24:48
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
miningman
19 Apr 14 21:17:43
hear from $BHP, $RIO why these shorts are the top #longs for 2014
Mining Man
19 Apr 14 20:51:23
$BHP $RIO $VALE talk about these #bluechip mining stocks at http://t.co/uy3r3nlGQL
Mining Man
19 Apr 14 20:37:09
$BHP $RIO $VALE talk about these blue chip mining stocks at http://t.co/uy3r3nlGQL
Stock_Tracker
19 Apr 14 15:33:07
Rio Tinto Plc (RIO) 55.26 $RIO BHP Billiton Ltd Shows No Mercy for Weaker Producers Vladimir Zernov, The Motle http://t.co/CD49b2U7Ry
Mining Man
19 Apr 14 11:28:50
$BHP $RIO $VALE talk about these blue chip mining stocks at http://t.co/uy3r3nlGQL
Mining Man
19 Apr 14 10:23:59
$BHP $RIO $VALE talk about these #bluechip mining stocks at http://t.co/uy3r3nlGQL
Mining Man
19 Apr 14 09:24:02
want #iron ore exposure think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
Mining Man
19 Apr 14 09:19:05
$BHP $RIO $VALE talk about these blue chip mining stocks at http://t.co/uy3r3nlGQL
miningman
19 Apr 14 05:50:24
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
miningman
19 Apr 14 04:37:23
hear from $BHP, $RIO why these shorts are the top #longs for 2014
miningman
19 Apr 14 01:57:11
hear from $BHP, $RIO why these shorts are the top #longs for 2014
miningman
19 Apr 14 01:36:17
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
Mark Plackett
19 Apr 14 00:50:38
RT @Leroy_Lynch: It's up to ERA: Rio Tinto sidesteps Ranger uranium open-cut mine rehabilitation costs http://t.co/SjVGfHg02Z #ausbiz #ausl…
Citizen Leroy
19 Apr 14 00:50:17
It's up to ERA: Rio Tinto sidesteps Ranger uranium open-cut mine rehabilitation costs http://t.co/SjVGfHg02Z #ausbiz #auslaw #ntpol $RIO
miningman
18 Apr 14 23:32:28
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
miningman
18 Apr 14 23:06:59
hear from $BHP, $RIO why these shorts are the top #longs for 2014
Mining Man
18 Apr 14 22:04:30
want #iron ore exposure #think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
Mining Man
18 Apr 14 21:54:15
want #iron ore exposure think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
miningman
18 Apr 14 21:33:46
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
miningman
18 Apr 14 21:03:45
hear from $BHP, $RIO why these shorts are the top #longs for 2014
Mining Man
18 Apr 14 20:52:18
want #iron ore exposure think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
PSU Investment Mgmt.
18 Apr 14 20:39:58
$RIO earnings slight miss. Continuing to invest in iron ore mining despite fears of China slowdown #materials http://t.co/fpKAb2EHvj
Mining Man
18 Apr 14 19:20:08
want #iron ore exposure think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
Mining Man
18 Apr 14 17:03:52
want #iron ore exposure #think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
Mining Man
18 Apr 14 11:01:55
$BHP $RIO $VALE talk about these blue chip mining stocks at http://t.co/uy3r3nlGQL
Mining Man
18 Apr 14 10:03:59
want #iron ore exposure think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
Mining Man
18 Apr 14 08:59:35
$BHP $RIO $VALE talk about these blue chip mining stocks at http://t.co/uy3r3nlGQL
WKRB News
18 Apr 14 07:29:02
Rio Tinto plc’s Buy Rating Reaffirmed at Nomura $RIO http://t.co/CkuBNTLtG2
Orson Gunnero
18 Apr 14 06:42:32
$RIO Rio TintoHs Canadian A http://t.co/57dJmUbqJZ
Cecily Humphrey
18 Apr 14 04:29:28
$RIO Rio TintoHs Canadian A http://t.co/pqg0cW0Pho
miningman
18 Apr 14 04:12:46
hear from $BHP, $RIO why these shorts are the top #longs for 2014
miningman
18 Apr 14 03:15:13
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
US Banking News
18 Apr 14 02:51:13
Rio Tinto Limited Stock Rating Reaffirmed by RBC Capital $RIO http://t.co/Tg1FSiuUil
miningman
18 Apr 14 00:40:53
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
US Consumer News
17 Apr 14 22:18:40
Rio Tinto Limited's outperform rating reiterated at RBC Capital. http://t.co/GIgHpZUvS5 $RIO #RIO
Media Sentiment
17 Apr 14 22:13:02
$RIO received a new alert. Find out why at http://t.co/WHJp8eTsSr #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 564
Analyst Ratings
17 Apr 14 22:12:21
Rio Tinto Limited's outperform rating reiterated at RBC Capital. http://t.co/2yYAf4VqIJ $RIO #RIO
Mining Man
17 Apr 14 20:43:58
$BHP $RIO $VALE talk about these blue chip mining stocks at http://t.co/uy3r3nlGQL
Mining Man
17 Apr 14 20:29:53
$BHP $RIO $VALE talk about these #bluechip mining stocks at http://t.co/uy3r3nlGQL
miningman
17 Apr 14 20:27:53
hear from $BHP, $RIO why these shorts are the top #longs for 2014 and 2015
Mining Man
17 Apr 14 20:15:07
want #iron ore exposure think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
miningman
17 Apr 14 20:05:49
hear from $BHP, $RIO why these shorts are the top #longs for 2014
Mining Man
17 Apr 14 18:41:17
want #iron ore exposure think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
stocknews247
17 Apr 14 18:32:05
$RIO - Foreign Executives Trapped in Mongolia -> http://t.co/BOGSFImcqf #stock #stocks #stockaction
Mining Man
17 Apr 14 17:18:39
$BHP $RIO $VALE talk about these #bluechip mining stocks at http://t.co/uy3r3nlGQL
Mining Man
17 Apr 14 17:02:31
$BHP $RIO $VALE talk about these blue chip mining stocks at http://t.co/uy3r3nlGQL
Mining Man
17 Apr 14 14:52:45
$BHP $RIO $VALE talk about these blue chip mining stocks at http://t.co/uy3r3nlGQL
Mining Man
17 Apr 14 12:34:55
want #iron ore exposure think $FMG, $AGO, $RIO, $CLF at http://t.co/hXfxRcDUtC
Jaycob Keating
17 Apr 14 11:34:08
$RIO Rio TintoHs Canadian A http://t.co/wTSLyToh0I
				
				
By  +Follow October 2, 2013 10:23AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.