Rio completes coal exit
Rio Tinto has struck a deal to sell its last coal mine, signalling the end of its involvement with the mineral.
Rio says it will sell its stake in the Kestrel underground coal mine in central Queensland to a consortium including private equity manager EMR Capital and Indonesian company Adaro Energy for $2.9 billion.
It is Rio’s third asset sale in just over a week.
The company earlier announced sale of the Hail Creek coal mine and two coal development projects in Queensland, comprising a total of $US4.15 billion ($5.39 billion) in divestments.
Rio last year sold its coal business in New South Wales' Hunter Valley to China-backed miner Yancoal for $US2.69 billion ($3.49 billion).
The company is now focused on iron ore, aluminium, copper and bauxite.
Analysts say its portfolio is “now leaner and greener”.
Investors that have avoided companies involved in coal are now expected to take another look at Rio Tinto.
“It's an interesting development for Rio, now being one of the only major mining companies in Australia that has no exposure to coal,” Simon O'Connor, chief executive of the Responsible Investment Association Australasia, told the ABC.
“It shifts Rio into a position where some of those investors who may have restrictions around coal will now be in a position to consider investing in Rio Tinto again.
“Certainly within our membership, there'll be a lot of investors assessing the implications of this for Rio and their own portfolios, and they'll be monitoring that divestment process over a number of months.”
Rio Tinto says the influx of funds will be used for “general corporate purposes”.