Rio Tinto to sell Australian coal assets to cut costs

3rd Apr 2013 13:30

Rio Tinto has hired Deutsche Bank to help sell Australian coal assets that could bring in around three billion dollars, The Wall Street Journal reported Wednesday.As part of the deal, Rio Tinto is searching for buyer for up to 29% of its Coal & Allied unit, which owns mines in the Australian state of New South Wales. Rio is working to reduce its interest in the unit to as little as 51% in an effort to cut costs and improve shareholder returns.The unit was snapped up by Rio Tinto and Japan's Mitsubishi Corp in 2011 which at the time valued the coal miner at 10.6bn Australian dollars.Rio Tinto is also looking to sell interests in the Clermont and Blair Athol thermal-coal mines in the country's state of Queensland, which could fetch more than $1.0bn, people familiar with the matter told the newspaper.A spokesman for Rio Tinto declined to comment.The reported sell-off, comes as thermal coal has become a less attractive as a long-term investment since prices tumbled to three-year lows in September.