Mar 9 2009
Rio Tinto has signed a sale and purchase agreement to sell its Jacobs Ranch coal mine to Arch Coal, Inc. for a total cash consideration of US$761 million. Completion of the transaction remains subject to customary closing conditions, including regulatory approvals.
"The sale of Jacobs Ranch is a further illustration of the high quality of our assets and the strong value we are able to obtain for shareholders," said Guy Elliott, chief financial officer, Rio Tinto. "This brings the total asset sales announced this year to US$2.5 billion."
Jacobs Ranch, located south of Gillette, Wyoming in the southern portion of the Powder River Basin, mines steam coal and ships it to customers throughout the United States. In November 2007, Rio Tinto Energy America (RTEA) - a business unit that operates US coal mines mainly in the Powder River Basin of Wyoming and Montana, including Jacobs Ranch - was identified for divestment. The process of divesting RTEA, which will remain one of the largest coal producers in the U.S. following this transaction, will continue.
During 2008, Rio Tinto realised almost US$3 billion from asset sales, comprising the Greens Creek mine in Alaska for US$750 million, its interest in the Cortez operation in Nevada for US$1.695 billion and the Kintyre uranium project in Western Australia for US$495 million. In January 2009, the Group announced the divestment of its interest in the Ningxia aluminum smelter in China for US$125 million as well as its potash assets and Brazilian iron ore operation for US$1.6 billion.