Rio Tinto to sell Blair Athol coal mine in Australia to Linc Energy
05 Oct 2013
Rio Tinto, the world's second-largest mining company, is selling its now closed Blair Athol coal mine in Australia to Linc Energy.
Linc Energy, a company that specialises in coal-based synthetic fuel production, yesterday said that the deal did not include any upfront costs.
Neither company revealed the financial terms of the transaction, but some Australian media reported that Linc Energy paid a meagre amount and would assume liabilities of the mine.
The deal includes the mining tenure, on-site assets and infrastructure and Rio Tinto and its partners will contribute an undisclosed sum to help it cover costs of rehabilitating the mine starting in 2016 and ending in 2019.
London-based Rio Tinto holds 71.2-per cent stake in the mine, while its partners hold the remaining.
The Blair Athol mine, which has been producing since 1984, was closed down by Rio Tinto in November 2012 after deciding not to extend its mining life after coal prices plunged in the global market.
Linc Energy, which focuses on both conventional and unconventional energy, believes there is still at least 10 million metric tons of coal reserves in the mine, which could be mined for another 10 years.
Linc Energy said that it will reopen the mine with a view to produce at least 3 million tones of thermal coal annually.
Rio Tinto, which has been selling non-core assets to reduce debt, recently sold its Northparkes copper mine in Australia to China Molybdenum for $820 million, and its two struggling aluminium plants in France to Germany's largest aluminium producer, Trimet Aluminium SE, and French state-run utility EDF, for an undisclosed sum.
But the company has failed to conclude a deal for its majority stake in the Clermont mine located close to Blair Athol in central Queensland and has abandoned plans of selling its diamond business after finding out that selling commodity assets has become tough in a depressed global economy.
