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Rio Tinto to exit Australian coal with US$2.25B Kestrel mine sale

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Rio Tinto to exit Australian coal with US$2.25B Kestrel mine sale

Rio Tinto agreed to sell its 80% stake in the Kestrel thermal and metallurgical coal mine in Queensland, Australia, to EMR Capital and PT Adaro Energy Tbk. for US$2.25 billion, the diversified commodities giant said March 27.

The latest deal brings Rio Tinto's proceeds from recent Queensland coal divestments to US$4.15 billion, after it had agreed earlier in March to sell its 75% interest in the Winchester South property for US$200 million and sell its 82% stake in the Hail Creek and Valeria coal properties for US$1.7 billion.

Income tax payable in Australia will be based on proceeds over the cost base of the assets at the time of completion.

The company expects a tax bill of about US$500 million, although "the quantum of tax payable will depend on the final proceeds (after taking into account working capital adjustments), the tax cost base at completion and the total of capital gains and losses realized by the Rio Tinto Australian tax consolidated group" as of end-2018, according to the statement.

According to an earlier report, Whitehaven Coal Ltd. and a consortium led by U.S. private equity group Apollo Global Management LLC were among the bidders vying for the Kestrel mine.