Glencore PLC said March 20 that it agreed to acquire Rio Tinto's 82% stake in the Hail Creek coal mine and a 71.2% stake in the Valeria coal project, both in Queensland, Australia, for US$1.7 billion in cash.
Under the deal, it may acquire up to an additional 18% interest in Hail Creek, held by Rio Tinto's joint venture partners Nippon Steel & Sumitomo Metal Corp. unit Nippon Steel & Sumitomo Metal Australia Pty. Ltd., Marubeni Coal Pty. Ltd. and Sumitomo Corp. subsidiary Sumisho Coal Development Pty. Ltd., for an additional payment of up to US$340 million.
The acquisition, subject to regulatory approvals, is expected to be completed in the second half.
In a separate, same-day statement, Rio Tinto said it is undertaking a separate process to sell its remaining Australian coal assets, including the Kestrel mine in Queensland.
As of December 31, 2017, Hail Creek had JORC resources of 794 million tonnes with proven and probable reserves of 142 million tonnes. Valeria had JORC resources of 762 million tonnes.