Rio Tinto has sold its 75% stake in the Winchester South coking and thermal coal project in Queensland to Whitehaven Coal for a total of $US200 million ($A250 million).
The consideration comprises $US150 million payable to Rio by Whitehaven when the sale completes and a further unconditional payment of $US50 million payable 12 months after the date of completion.
Whitehaven said last night the purchase of Winchester South will be funded by cash and existing finance facilities,
Retail property manager Scentre Group (the old Westfield Australia) has the remaining 25% stake in Winchester South. Based on the purchase price by Whitehaven, that remaining stake is worth $US50 million.
Earlier this week Rio sold its stakes in the Hail Creek mine and the Valeria project in Queensland for a total of $US1.7 billion to Glencore.
Since 2013 Rio has sold $US9 billion of assets.
Rio Tinto is still marketing its interest in the Kestrel underground mine, also in Queenkand which is the company’s remaining Australian coal asset.
Winchester South is a large undeveloped coal project located in the northern Bowen Basin, around 30 kilometres south-east of the Moranbah.
The Winchester South tenement contains 356 million tonnes of coal mineral resources.
Once developed, Winchester South is expected to produce coking coal and thermal coal products.
Rio Tinto chief executive J-S Jacques said "We believe this agreement for the sale of Winchester South represents the best option for the future development of the project while delivering attractive value for Rio Tinto as we continue to streamline our portfolio."
The transaction is subject to customary conditions precedent being satisfied, including the receipt of regulatory approvals from Australia’s Foreign Investment and Review Board and the Queensland Government. Subject to all regulatory approvals and other conditions precedent being satisfied, completion is expected to occur in the June quarter.
