Private equity firms and public companies are currently competing with each other over the sale of two Rio Tinto coking coal mines.
Industry insiders believe that the acquisitions will give buyers the opportunity to get a foothold in one of this year’s strongest commodities.
The official process for the mines, both located in Queensland, is due to begin soon and one interested party has said that it’s bringing, “an unprecedented number of people to the table.”
Both mines are set to sell for around $2 billion each according to analysts, and their sale would take them closer to exiting Australian coal completely, with the issue-ridden sale of their Coal and Allied assets left to complete.
The sale to Chinese-state owned company Yancoal whilst approved by the Foreign Investment Review Board has attracted concerns from the financial community due to high levels of debt, and recent Chinese capital controls.
Jim Beyer, managing director of iron ore miner Mt Gibson Iron Ltd said this week coking coal mines in Australia would fit his company’s diversification plans into other commodities.
“Coking coal is a business we have been looking at,” Beyer said. “There are quality assets out there, but they are very competitive and limited,” he said, adding that Mt Gibson was also looking at base metals and other commodities.
The company declined to comment on whether it was taking offers on the two Australian mines.