Rio Tinto sells its Bengalla stake

Rio Tinto sells its Bengalla stake

RIO Tinto has struck a deal to sell its share in the Hunter’s Bengalla mine.

New Hope Corporation Limited will take over the 40 per cent stake in the smallest of Rio Tinto’s three Hunter mines.

The 40 per cent stake was sold for $606 million.

Rio Tinto copper and coal chief executive Jean-Sébastien Jacques said the sale would help the company remodel its mining portfolio to deliver shareholder value.

“It demonstrates our commitment to further strengthening our balance sheet, maintaining a disciplined  approach to allocating capital across the group and delivering strong returns for shareholders through the cycle,” Mr Jacques said.

“Bengalla mine is a robust, well-managed business with a productive workforce and we believe it will have a positive future under the new owner with different capital allocation priorities.

“We expect the business to make a significant and ongoing contribution to the New South Wales economy.”

The move follows a simplified ownership structure that gave Rio Tinto full ownership of Coal & Allied, with Mitsubishi development shifting its 20 per cent stake into a 32.4 per cent direct stake in the Hunter Valley Operations mine.

Coal & Allied holds a 67.6 per cent stake including management rights in Hunter Valley Operations as well as 80 per cent and 55.6 per cent stakes in the Mount Thorley and Warkworth operations.

It also outright owns the Mount Pleasant mine.

The Bengalla sale is expected to close in early 2016.