Rio Tinto has entered into a binding agreement with Whitehaven Coal Limited for the sale of its entire 75 per cent interest in the Winchester South coal development project in Queensland, Australia, for $200 million.
Total consideration is comprised of $150 million payable to Rio Tinto by Whitehaven on the date of completion and a further unconditional payment of $50 million payable 12 months after the date of completion.
Rio Tinto chief executive J-S Jacques said “We believe this agreement for the sale of Winchester South represents the best option for the future development of the project while delivering attractive value for Rio Tinto as we continue to streamline our portfolio.”
The transaction is subject to customary conditions precedent being satisfied, including the receipt of regulatory approvals from Australia’s Foreign Investment and Review Board and the Queensland Government. Subject to all regulatory approvals and other conditions precedent being satisfied, completion is expected to occur in the second quarter of 2018.
A separate process remains underway to sell Rio Tinto’s interest in the Kestrel underground mine, the company’s remaining Australian coal asset. Rio Tinto will update the market on this process as appropriate.