Australian shareholders in Rio Tinto have joined their London counterparts in approving the $US2.679 billion sale of its NSW thermal and soft coking coal mines to Yancoal of China.
UK shareholders in the plc company gave the deal a tick on Tuesday and Australian shareholders said yes yesterday.
Yancoal increased bid for Rio’s Coal & Allied assets, comprising $US2.45 billion cash upfront and $US240 million in royalty payments (with $US200 million paid quickly) which topped the $US2.67 billion offer from Glencore.
In the end Rio shareholders voted overwhelming in favour of the Yancoal deal, with 97.2% of a just over one billion votes cast in favour of the deal,or 97% of shareholders of Rio Tinto’s UK and Australian-listed arms.
Rio Tinto Chairman Jan du Plessis said funds from the sale had yet to be allocated within the company amid some calls by shareholders to use the money to boost dividends or buy back shares.
"What to do with the money? That’s a good problem to have,” du Plessis told Thursday’s meeting of shareholders before they voted in favour of the deal.
Yancoal is a 78% subsidiary of Yanzhou Coal Mining Co, which is 56% owned and controlled by a Chinese state-owned enterprise, Yankuang Group which is tipping $US2.1 billion into the deal because Yancoal Australia found it impossible to raise the money on its own.
Xiyong Li, Yancoal’s chairman said in a statement: "This is a very positive result for our business and we are pleased that the Rio Tinto shareholders have now endorsed our compelling transaction for the tier one Coal & Allied assets. Rio’s support for the acquisition signals the next stage in our strategic growth.”
Rio shares jumped 3.3% to a one-month high in Sydney on Thursday, not because of the Yancoal deal but because of another surge in Chinese iron ore prices with the spot price around $US62 a tonne.
