Site icon China Economic Review

Chinese firm buys Rio Tinto coal assets for $2.4bn

Rio Tinto, capitalizing on last year’s sharp rally in commodity prices, sold a major piece of its coal business for $2.45 billion to a Chinese company, the biggest move yet in the British-Australian mining giant’s move to shed its coal assets. The sale of subsidiary Coal & Allied Industries. includes Rio’s giant coal operation in Australia’s Hunter Valley, which the company has been attempting to unload for years. The buyer, Yancoal Australia, will give Rio Tinto an initial payment of $1.95 billion upon completion and a further $500 million in equal installments over the next five years, Rio Tinto said. The deal comes amid a red-hot market for coal, according to The Wall Street Journal. Prices surged in 2016 on the back of a cutback in Chinese production and a boost in demand sparked by a massive infusion of stimulus in China.

Exit mobile version