Indonesia's powerful Salim group has extended its reach into Australia, this time with the purchase of one of the largest coal projects in NSW from Rio Tinto.
For Rio, the sale of its second coal venture in NSW in a matter of months extends its retreat from the coal industry amid the extended slump in coal prices.
The group has sold the Mount Pleasant thermal coal project to the privately owned MACH Energy Australia Pty Ltd for $US224 million ($320 million). Rio is to also continue to receive royalties from the sale of coal from the mine.
Mach Energy is controlled by Droxford International, which is an entity associated with Indonesia's Salim group, which also has an interest in the Goodman Fielder, the food group.
The sale by Rio raises to more than $US830 million ($1.18 billion) the miner has raised from the sale of Australian coal mines, since it follows the recent sale of its 40 per cent interest in the neighbouring Bengalla coal joint venture for $US606 million. The buyer of that stake was New Hope.
"These agreements for over $US800 million in asset sales deliver significant value for our shareholders, with the potential for future royalties from Mount Pleasant," Rio Tinto copper and coal chief executive Jean-Sébastien Jacques said.
"We believe Mount Pleasant can have a very positive future under its new owners with different priorities for development and capital allocation."
In total, Rio has now announced or completed $US4.7 billion of divestments since January 2013, it said.
Mount Pleasant is a large mining project in the Hunter Valley, north of Sydney with total marketable reserves of 474 million tonnes of coal reserves. It has government approvals to produce 10.5 million tonnes of coal annually, but it has remained undeveloped.
Rio had been working to develop the mine by using facilities of the neighbouring Bengalla project, in which it was, until recently, a shareholder, but with little material progress.
The sale is expected to close in the second quarter of 2016.
Rio has been rumoured for some time to have its remaining NSW thermal coal venture - the Mt Thorley Warkworth mine and the so-called Hunter Valley operations - also on the market.
Along with paying $1.37 billion for Goodman Fielder in 2014 with other parties, the Salim group also participated in the purchase of locally listed miner Robust Resources which gave it exposure to some gold properties in central Asia.
The sale includes provision for Rio to receive a royalty payment from the new owner once the coal price tops $US72.50, which is significantly above the present steaming coal price ex-Newcastle of around $US50 a tonne.
