21 Mar Glencore acquires $1.7 billion Hail Creek coal mine as rivals exit the industry
Glencore (LSE:GLEN) will purchase Rio Tinto’s (ASX:RIO) Hail Creek coal mine in Queensland for US$1.7 billion, in a deal which highlights a divergence in attitudes to the coal industry between Glencore and its rivals.
The deal will see Rio transfer its 82% interest in Hail Creek to the Swiss-based firm, along with its 71.2% interest in the Valeria coal project and follows a similar large-scale deal between the mining giant’s last year.
Glencore purchased half of Rio’s Hunter Valley coal operations in Australia for $1.1 billion, in a deal with China’s Yancoal Australia.
While Glencore has tightened its grip on the coal industry, where it is already the world’s largest exporter of thermal coal used for power stations, Rio has relinquished its position in the polluting industry ahead of a full-scale exit.
The Anglo-Australian miner revealed its strategic decision to exit the industry in 2017, instead wishing to focus on growth in iron ore, copper and its aluminum division.
Following the announcement, Rio reaffirmed its ambition to sell its remaining Australian coal assets, the Kestrel coking coal mine and the Winchester South development project.