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.


Signup for our daily newsletter and get our best articles emailed right to you!

Results for RIO
RGN Online
27 Jan 15 01:57:10
.@RioTinto $RIO is willing to give up a $1.6bn royalty from #OyuTolgoi to end dispute with #Mongolian government http://t.co/ClOGlFxYyB
The Legacy News
27 Jan 15 01:56:24
Rio Tinto plc’s “Sell/Neutral” Rating Reiterated at Goldman Sachs $RIO http://t.co/HwrX9JeUHe
Ido Meroz
26 Jan 15 21:46:04
RT @David_Scutt: Percentage change since Dec 31, 2013 $RIO -18.9%, $FMG -66.6%, $MGX -80.1%, $AGO -85.2%, $BCI -91.8% #ironore http://t.co…
Chris MacDougall
26 Jan 15 20:26:27
Comments welcomed: $Rio offers to drop $1.6bn royalty to solve #Mongolia standoff, GoM standing still - http://t.co/zo5rvbOcmj
Leslie Shaffer
26 Jan 15 20:08:09
Why #ironore won’t rebound any time soon http://t.co/vqTdrxf8vS $AUDUSD $USDCNY $BHP $RIO
Eli Pritsker
26 Jan 15 20:02:10
RT @10Xtrading: 4 Charts turnings around with bullish engulfing candles on the daily watch em for longs Tuesday http://t.co/q3ytHVWrbP $MYL…
Stock Market Basics
26 Jan 15 19:42:52
RT @10Xtrading: 4 Charts turnings around with bullish engulfing candles on the daily watch em for longs Tuesday http://t.co/q3ytHVWrbP $MYL…
Eli Baram
26 Jan 15 19:19:21
RT @David_Scutt: Percentage change since Dec 31, 2013 $RIO -18.9%, $FMG -66.6%, $MGX -80.1%, $AGO -85.2%, $BCI -91.8% #ironore http://t.co…
Anthony J Hargreaves
26 Jan 15 18:49:09
RT @BBYltd: The AUS market is about 0.5% higher as gains among big banks offset resources slide; $BHP-1.6%, $RIO -0.4%, $FMG -5.6% #ausbiz
BBY Limited
26 Jan 15 18:47:59
The AUS market is about 0.5% higher as gains among big banks offset resources slide; $BHP-1.6%, $RIO -0.4%, $FMG -5.6% #ausbiz
Kevin Gandiya
26 Jan 15 18:28:05
RT @FinancialReview: JPMorgan says Glencore’s debt rating is at risk of hitting 'junk' if commodity prices stay depressed http://t.co/szHdk…
10X Trading
26 Jan 15 17:52:23
4 Charts turnings around with bullish engulfing candles on the daily watch em for longs Tuesday http://t.co/q3ytHVWrbP $MYL $RIO $ARR $NG
John Law
26 Jan 15 16:13:28
RT @David_Scutt: Percentage change since Dec 31, 2013 $RIO -18.9%, $FMG -66.6%, $MGX -80.1%, $AGO -85.2%, $BCI -91.8% #ironore http://t.co…
Jordan Eliseo
26 Jan 15 15:54:49
RT @David_Scutt: Percentage change since Dec 31, 2013 $RIO -18.9%, $FMG -66.6%, $MGX -80.1%, $AGO -85.2%, $BCI -91.8% #ironore http://t.co…
Investing Insight
26 Jan 15 15:52:47
KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/T3zYx8JnLo $XJO $BHP $RIO $QAN
Abraham VanVarenberg
26 Jan 15 15:44:55
RT @KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
David Scutt
26 Jan 15 15:44:32
Percentage change since Dec 31, 2013 $RIO -18.9%, $FMG -66.6%, $MGX -80.1%, $AGO -85.2%, $BCI -91.8% #ironore http://t.co/M9ccMHPCVe
CommSec
26 Jan 15 15:44:22
Despite mining industry's 1.8% slide today - the sector surged 6.2% last wk. $BHP -2.3%, $RIO -2.6% & $FMG -8.2% this morn #ausbiz ^SD
Doug North
26 Jan 15 15:40:20
RT @KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
stockmarketnow
26 Jan 15 15:40:03
RT KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/hO66WLSkT9  $XJO $BHP $RIO $QAN
Alpha Maven
26 Jan 15 15:39:45
RT @KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
solomon anzagra
26 Jan 15 15:38:30
RT @KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
James
26 Jan 15 15:37:31
RT @KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
FinanzLinksASIA
26 Jan 15 15:35:39
RT @KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
DayTrading Ninja
26 Jan 15 15:34:59
RT @KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
MKTWAsia
26 Jan 15 15:34:13
RT @KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
MarketWatch
26 Jan 15 15:34:13
RT @KitchenNews: Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
Michael Kitchen
26 Jan 15 15:33:58
Australia bank, retail stocks gain as miners retreat -- details here: http://t.co/XNtF8XSZZE $XJO $BHP $RIO $QAN
FinSentS Euro 600
26 Jan 15 15:25:29
$RIO:LN Iron Ore Extends Collapse as China Slowdown Hurts Demand Outlook #RIO TINTO GROUP (GBP) http://t.co/abzuMoMBHi #STOXX600
Info Business ™
26 Jan 15 15:18:55
RT @FinancialReview: JPMorgan says Glencore’s debt rating is at risk of hitting 'junk' if commodity prices stay depressed http://t.co/szHdk…
Anthony Fulton
26 Jan 15 15:18:00
RT @FinancialReview: JPMorgan says Glencore’s debt rating is at risk of hitting 'junk' if commodity prices stay depressed http://t.co/szHdk…
Rachel Titley
26 Jan 15 15:18:00
RT @FinancialReview: JPMorgan says Glencore’s debt rating is at risk of hitting 'junk' if commodity prices stay depressed http://t.co/szHdk…
FinSentS UK100
26 Jan 15 15:17:39
$RIO:LN Iron Ore Extends Collapse as China Slowdown Hurts Demand Outlook #RIO TINTO GROUP (GBP) http://t.co/eSCxGgv1se #LDN100
Financial Review
26 Jan 15 15:10:39
JPMorgan says Glencore’s debt rating is at risk of hitting 'junk' if commodity prices stay depressed http://t.co/szHdkTVp3a $RIO #ausbiz
carlo
26 Jan 15 12:37:17
RT @RioTinto: Our fourth quarter 2014 operations review is available here → http://t.co/v9v128da7Z $RIO #mining http://t.co/8cGGOy69i6
YuliyaInopinaPR
26 Jan 15 12:24:29
RT @Kapitall: A look at #copper and its place in the global energy market via @SWGoldReport http://t.co/HOGsUlt7ja $BHP $FCX $RIO http://t.…
Ticker Report
26 Jan 15 11:25:35
Rio Alto Mining Limited Given Average Rating of “Buy” by Brokerages $RIO http://t.co/QJ1a7JmA9r
janet gale
26 Jan 15 08:00:22
$RIO - Rio Tinto PLC Director/PDMR Shareholding http://t.co/mA6I5DiL0t
FinSentS Euro 600
26 Jan 15 07:30:04
$RIO:LN Iron Ore Extends Collapse as China Slowdown Hurts Demand Outlook #RIO TINTO GROUP (GBP) http://t.co/8f5oq6Wsmm #STOXX600
FinSentS UK100
26 Jan 15 07:19:38
$RIO:LN Iron Ore Extends Collapse as China Slowdown Hurts Demand Outlook #RIO TINTO GROUP (GBP) http://t.co/F4cw36K58v #LDN100
The Legacy News
26 Jan 15 06:27:21
Rio Tinto plc Raised to Buy at Investec $RIO http://t.co/tqakeJFDB9
Sean Brodrick
26 Jan 15 06:18:49
RT @H3bK11: Iron ore rout accelerates as China demand slows http://t.co/iClHhrXODW $VALE $BHP $RIO
Gennady Kupershteyn
26 Jan 15 06:17:33
86 Short ideas setting up 4 next market pullback. http://t.co/Lh31llr9yS $CEO $RIO $SCTY $CONN $F $SAN $TSLA $WYNN $TOL $MU $QQQ $SPY
Forex  News Insider.
26 Jan 15 06:13:42
Iron ore rout accelerates as China demand slows http://t.co/iClHhrXODW $VALE $BHP $RIO
DJ Olive
26 Jan 15 05:57:56
RT @MarketCurrents: Iron ore rout accelerates as China demand slows http://t.co/VyhzCreOox #premarket $VALE $BHP $RIO
Zenzo L
26 Jan 15 05:46:14
Iron ore rout accelerates as China demand slows http://t.co/npEGfSa3GT #mining #ironore #China $VALE $BHP $RIO
DennyCrane
26 Jan 15 05:33:26
RT @MarketCurrents: Iron ore rout accelerates as China demand slows http://t.co/VyhzCreOox #premarket $VALE $BHP $RIO
SA Breaking News
26 Jan 15 05:31:07
Iron ore rout accelerates as China demand slows http://t.co/VyhzCreOox #premarket $VALE $BHP $RIO
Financial BUZZ Just-
26 Jan 15 04:51:57
Tickers trending on TWTR in last 1 hour $RIO $UPS $MCD $T $AMGN http://t.co/sVli0zbpzQ
WKRB News
26 Jan 15 04:21:53
Cowen and Company Analysts Give Rio Tinto plc a $40.00 Price Target $RIO http://t.co/rZmKiTs3kQ
				
				
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.