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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Liked What You Read? Join Equities.com and Connect With Your Favorite Financial Experts FOR FREE! Members of Equities.com gain access to our leading financial news and content, active social investment community, proprietary research tools including the 2014 Small-Cap Stars, E.V.A. reports and more.

Results for RIO
Financial News
27 Aug 14 12:43:44
$RIO: Rio Tinto plc (ADR) To Go Ex-Dividend on August 13th (RIO) http://t.co/1OTHKVhEL5 http://t.co/1pJ15C7Cjz
Market Int Center
27 Aug 14 12:12:26
Rio $RIO Trading Near $56.34 Resistance Level ( http://t.co/pAboik94RO )
Lightspeed
27 Aug 14 11:57:32
Call/Put Highest % volume changes: Calls: $ARMH, $WFT, $PWE, $NOW, $GPRE. Puts: $RIO, $BHP, $JOY, $WSM, $RSH.
Klondike Strike
27 Aug 14 10:27:05
RT @NSKAmericas: RT @YuhanFei Largest #iron ore miners smashing Chinese competitors http://t.co/Kf6L26GzWt #mining #china $rio $bhp $vale
NSK Americas
27 Aug 14 10:25:58
RT @YuhanFei Largest #iron ore miners smashing Chinese competitors http://t.co/Kf6L26GzWt #mining #china $rio $bhp $vale
PDAC
27 Aug 14 10:17:21
RT @YuhanFei: Largest #iron ore miners smashing Chinese competitors http://t.co/FbsfsQC2WG #mining #china $rio $bhp $vale
Klondike Strike
27 Aug 14 10:17:15
RT @YuhanFei: Largest #iron ore miners smashing Chinese competitors http://t.co/FbsfsQC2WG #mining #china $rio $bhp $vale
Yuhan Fei
27 Aug 14 10:14:36
Largest #iron ore miners smashing Chinese competitors http://t.co/FbsfsQC2WG #mining #china $rio $bhp $vale
Companies in News
27 Aug 14 09:43:48
$RIO: Miners drop in London after weak China PMI http://t.co/OTeFz4Bopi http://t.co/Zf1Dk2UIOg
CBOE
27 Aug 14 08:53:05
Active puts @ CBOE; $VALE Jan 11 $RIO Jan 40 $VXX Sep 28 $BHP Jan 55
Livevol Community
27 Aug 14 08:50:51
Block Trade: 11:35 $RIO Jan17'15 40 P (CBOE) 0.20 19000x Today's Full Report: http://t.co/qKNFox0HlO
BNK Invest
27 Aug 14 08:49:54
Analyst Favorites: $RIO Tinto Ranks As a Top Metals Pick #gold #silver #metals http://t.co/EEKV0NSAPR
US Banking News
27 Aug 14 07:56:11
Weekly Research Analysts’ Ratings Changes for Rio Tinto plc $RIO http://t.co/4RhUfBSbCx
Ticker Report
27 Aug 14 07:44:21
Weekly Research Analysts’ Ratings Changes for Rio Tinto plc $RIO http://t.co/Vj2Arj8lY6
Stock News Headlines
27 Aug 14 06:43:52
$RIO: New Analyst Strong Buy Recom Stocks- Novavax, Inc. (NASDAQ:NVAX), Rio ... http://t.co/0Nuv4D9LIW http://t.co/ynpKW5BdZJ
Wall Street Monitor
27 Aug 14 05:43:45
$RIO: China’s manufacturing purchasing managers’ index hits 18-month high http://t.co/vaqB6ybchY http://t.co/JWMLw7kO5g
WKRB News
27 Aug 14 04:50:58
Rio Tinto plc’s Outperform Rating Reaffirmed at Sanford C. Bernstein $RIO http://t.co/BKAf4Vt5fo
Lee Samaha
27 Aug 14 03:04:56
How to invest in the industrial metals and minerals industry $VALE $RIO $BHP $AA $NUE http://t.co/jh4SIIeIKM
Halifax ShareDealing
27 Aug 14 01:40:53
Yesterday's top #FTSE100 fallers - Antofagasta $ANTO, Reckitt Benckiser $RB, Rio Tinto $RIO, Fresnillo $FRES and Smith&Nephew $SN.
WDT44
26 Aug 14 19:23:38
Rio Tinto plc Analyst Ratings, Earnings, | $RIO | LON:RIO | Analyst Ratings Network https://t.co/L0oGJqg0Hg via @RatingsNetwork
Stock News Updates
26 Aug 14 17:43:40
$RIO: Must-know: An overview of BHP Billiton http://t.co/hJedCjhxn6 http://t.co/IysgBencCU
Wall Street Monitor
26 Aug 14 16:43:42
$RIO: Rio Tinto plc (ADR) (NYSE:RIO) Reviewing Stake In Bougainville Copper Ltd. http://t.co/2sFmRK8x9w http://t.co/WUgNcGKTxI
Lone wolf
26 Aug 14 16:03:48
Opened $RIO bear put spread September. Willing to wait as Iron ore about to make new low.
Alysia Sarkisian
26 Aug 14 08:53:31
RT @SeekingAlpha: Bukit Asam's Production And Delivery Growth Offset Weak Pricing http://t.co/n6UwbA4VYV $RIO $CSUAY $BTU $BHP $TBNGY
Seeking Alpha
26 Aug 14 08:45:50
Bukit Asam's Production And Delivery Growth Offset Weak Pricing http://t.co/n6UwbA4VYV $RIO $CSUAY $BTU $BHP $TBNGY
Stock Market News
26 Aug 14 07:43:45
$RIO: Must-know: Why Chinese steel production is growing steadily http://t.co/VcgFcif2fM http://t.co/7iTOtf2tOF
Seeking Alpha
26 Aug 14 07:30:46
Mount Gibson Iron Still Needs To Buy Its Future http://t.co/YVpWknfgL4 $FSUGY $BHP $RIO $MTGRF
Market Int Center
26 Aug 14 06:52:28
Rio $RIO Trading Near $57.10 Resistance Level ( http://t.co/WNjNiyoNTM )
Adam Grimes
26 Aug 14 06:37:27
Early morning stats updated: http://t.co/xnrBLQat9e $DSW, $APO, $KNDI, $CELG, $DRL(E), $BBY, $TSL, $RIO, $NEM
US Banking News
26 Aug 14 06:14:46
Rio Tinto plc Given “Outperform” Rating at Sanford C. Bernstein $RIO http://t.co/wZGmysuNz0
aviatelive
26 Aug 14 06:03:46
#Aluminium and the F-150 http://t.co/sPDTGoeXkr #aviateEUROPE $NHY $RIO $AA
INVERTIR EN BOLSA
26 Aug 14 04:52:04
$GLD $SLV $NUGT $DUST $ABX $AUY $FCX $BVN $RIO $NEM $VALE - Gold Price rises on technical buying, gains are limited http://t.co/EhddNSt5Oh
Market Monitor
26 Aug 14 04:43:42
$RIO: China’s manufacturing purchasing managers’ index hits 18-month high http://t.co/J3r4hzauKq http://t.co/JkOryoJzIf
US Consumer News
26 Aug 14 03:44:36
Rio Tinto plc's outperform rating reiterated at Sanford C. Bernstein. GBX 4,000 PT. http://t.co/fNQb5P7Chm $RIO #RIO
Media Sentiment
26 Aug 14 03:40:06
$RIO received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 22
Analyst Ratings
26 Aug 14 03:39:37
Rio Tinto plc's outperform rating reiterated at Sanford C. Bernstein. GBX 4,000 PT. http://t.co/3Fi0wThlYk $RIO #RIO
Trustnet Direct
26 Aug 14 02:25:02
Markets are open and here is our Market comments on #FTSE $RIO $BNZL http://t.co/ZhLVcjLwLH @TrustnetDirect
Alastair McCaig
26 Aug 14 00:09:05
5mins into this short week, these are the #FTSE movers. Mining sector doing its best to drag us lower $RIO $FRES $BLT http://t.co/SHaRm2hayC
Stock News Guru
25 Aug 14 22:43:47
$RIO: Rio Tinto plc's "Outperform" Rating Reaffirmed at BNP Paribas (RIO) http://t.co/yO5fV0uPvJ http://t.co/Xky4kG9xIz
Wall Street Monitor
25 Aug 14 21:43:41
$RIO: Miners drop in London after weak China PMI http://t.co/TTF8MsI4IX http://t.co/7DtaOlMnbS
Patrick
25 Aug 14 21:00:03
10 - Sentiment Shifted Stocks: $KKR $AUQ $BAX $PEIX $SNE $AMD $ACRX $DB $AEO $RIO
Michael Gable
25 Aug 14 19:03:21
RT @smartinvestr: Today's tip from @FairmontEquAU's @GableMichael: Go short $RIO, long $FMG #ASX 3smsf #investing #austocks http://t.co/M44…
Smart Investor
25 Aug 14 18:36:05
Today's tip from @FairmontEquAU's @GableMichael: Go short $RIO, long $FMG #ASX 3smsf #investing #austocks http://t.co/M44h53Bdxu
Stock Headlines
25 Aug 14 10:43:49
$RIO: Must-know: Where BHP’s major assets are located http://t.co/DmTJpGDoMl http://t.co/9kw7AdFZR2
Dividend Master
25 Aug 14 06:32:53
Iron Ore falls again to 89.20 . Close to LT lows . Up go $CAT $CLF $RIO $VALE on certainty new China stimulus coming
Biz Headlines
25 Aug 14 05:43:48
$RIO: New Analyst Strong Buy Recom Stocks- Novavax, Inc. (NASDAQ:NVAX), Rio ... http://t.co/sMLCo2rjZS http://t.co/BeNJXmo0v1
FonsieTrader
25 Aug 14 05:09:45
Parabolic Sar Sell Signals 2/2$PES $REGN $RIO $SGEN $RMBS $SINA $SNTA $SQNM $SWC $TSO $CUBE $UTIW $VIPS $WBAI http://t.co/VlfOxAuaMg
Leda
25 Aug 14 04:52:43
$RIO (Rio Tinto) #ASX Daily. Short triggered, although volume not compelling http://t.co/7SWqUmFIAj
Stock Market Monitor
25 Aug 14 04:43:45
$RIO: Must-know: Where BHP’s major assets are located http://t.co/O8dq3ALyXu http://t.co/3TzfYqSs1e
Business News Watch
25 Aug 14 03:43:39
$RIO: Rio Tinto plc Rating Reiterated by Canaccord Genuity (RIO) http://t.co/JIPAvf7XoV http://t.co/OsHDUSbIlB
				
				
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.