Rio Tinto Group, the world’s second-largest mining company, is close to selling its Blair Athol coal mine in Australia to Linc Energy Ltd., according to two people with knowledge of the matter.
Talks are at an advanced stage and an agreement may be announced as soon as tomorrow, said the people, asking not to be identified as the details are confidential. The mine in Queensland state’s Bowen Basin has been shuttered since November after prices for thermal coal slumped.
Rio Tinto, based in London, is seeking to dispose of additional mining operations after selling more than 20 assets for $12 billion to help cut debt and focus on more profitable operations. The company in July agreed to sell its Northparkes copper mine in Australia to China Molybdenum Co. for $820 million.
While Rio has sold $1.9 billion of assets this year, it also abandoned the sale of an Australian aluminum business and its diamonds unit after failing to find buyers. Australian coal prices have fallen 7 percent from a year ago to $78.30 a ton as of Sept. 27, according to data from IHS McCloskey.
Linc, which is studying a gas-to-liquids venture in Russia with billionaire Roman Abramovich, said today it plans to raise money selling shares in a move to Singapore’s stock exchange. The Brisbane-based company asked for its shares to be halted pending a coal acquisition.
The Wall Street Journal reported earlier today that Rio was in talks to sell the mine to Linc. Spokesmen for Rio and Linc declined to comment.