Rio Tinto To Sell 40% Stake In Bengalla Joint Venture For $606 Mln - Quick Facts

(RTTNews) - Anglo-Australian mining giant Rio Tinto Plc (RTNTF, RIO, RIO.L, RTPPF) Wednesday announced that it has reached a binding agreement for the sale of its 40 percent interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation Limited for $606 million. The sale of the interest in the Bengalla Joint Venture is expected to close in the first quarter of 2016. Bengalla is the smallest of three coal mines in the Hunter Valley of New South Wales in which Rio Tinto holds an interest, producing 8.6 million tonnes in 2014. Based on a 40 percent Rio Tinto share, production is 3.4 million tonnes.

Rio Tinto and Mitsubishi Development have recently agreed a simplification to the ownership structure of Coal & Allied which helps enable this transaction. Under the agreement, Rio Tinto will assume 100 percent ownership of Coal & Allied. Mitsubishi Development will move from holding a 20 percent stake in Coal & Allied to holding a direct 32.4 percent stake in the Hunter Valley Operations mine. Subsequent to the completion of this transaction, Rio Tinto as a 100 percent owner of Coal & Allied will receive all consideration associated with the sale of Rio Tinto's interest in the Bengalla Joint Venture. It will hold a 67.6 percent interest with management rights in the Hunter Valley Operations mine.

The transactions are subject to certain conditions precedent being met, including the pre-emption rights of the Bengalla Joint Venture partners.

Rio Tinto has now announced or completed $4.5 billion of divestments since January 2013, with the agreed sale of its interest in the Bengalla Joint Venture.