Rio Tinto completes divestment of Coal & Allied Industries Limited for $2.69 billion

In Latest News

Rio Tinto has completed the sale of its wholly-owned subsidiary Coal & Allied Industries Limited to Yancoal Australia Limited. 

Yancoal takes over management of Rio Tinto’s thermal coal business in the Hunter Valley region of New South Wales this week.

Rio Tinto will receive total consideration of $2.69 billion for the sale, together with customary adjustments for net debt and net working capital at completion. The $2.69 billion comprises $2.45 billion in cash paid today and a further $240 million of unconditional guaranteed royalty payments. The first royalty payment of $10 million was made today and an additional $100 million will be received by the end of this year. A further $90 million is expected before the end of 2018. Under the terms of the sale, Rio Tinto may also receive an additional royalty linked to the coal price capped at $410 million.

Rio Tinto will use the consideration received for general corporate purposes and the Group’s capital allocation framework will be applied.

With production from all Hunter Valley coal operations transferring to Yancoal from today, the Group’s guidance for thermal coal production in 2017 has been revised to 13-14 million tonnes, from 17-18 million tonnes previously.

The taxable gain on the disposal of these assets is expected to be largely offset by carried forward capital losses in Australia. Therefore the cash tax payable is expected to be relatively low compared to the quantum of the taxable gain.

 

You may also read!

CS Energy Kogan Power Station

Quick jobs on offer at $90M overhaul in southern Queensland

Job seekers who are looking for a short-term position are wanted for a $90 million project in the Darling

Read More...
Federal Court of Australia

Court dismisses Indigenous land appeal against $21B coal project

An Asia-backed resources company has a valid native title agreement to build a $21 billion coal project on Indigenous

Read More...
Extinction Rebellion blocking intersections Brisbane

Anti-mining protestors plan to block CBD intersections all week

Anti-Adani activists brought city traffic to a standstill for hours to protest against a recently approved $21 billion mining

Read More...

Leave a reply:

Your email address will not be published.

Mobile Sliding Menu