Mitsubishi stake in Rio Tinto Hunter Valley coal assets to be sold to ‘superior bidder’ in deal

Mitsubishi stake in Rio Tinto Hunter Valley coal assets to be sold to ‘superior bidder’ in deal

Rio Tinto’s sale of its Hunter Valley coal assets now hinge on Yancoal’s ability to prove the stability of their financing situation after Mitsubishi agreed to divest their stake in Coal & Allied to either the state-owned Chinese miner or Swiss coal giant Glencore.

In a statement made earlier this week, the Japanese conglomerate said: “Mitsubishi has agreed to sell both its interests in HVO and (Warkworth) to whichever party (being either Yancoal or Glencore) that ultimately becomes the successful purchaser of all of the shares in (Coal & Allied).”

Mitsubishi’s status as a “tag along” investor means that it does not have to choose between the two potential buyers. Instead the assets will be bought up by whichever company Rio Tinto designates as the preferred purchaser of Coal & Allied.

Yancoal has offered USD$940 million for Mitsubishi’s 32.4% stake in the Hunter Valley Operations (HVO), while Glencore has put forward a bid worth USD$920.

In light of the rapidly approaching Rio Tinto shareholder meeting to decide on the sale of Coal and Allied, reports indicate that Rio Tinto will make a swift decision on whether the higher offer of $2.55 billion from the internationally listed Swiss giant for the Hunter Valley assets constitutes a superior bid.

Mitsubishi has made clear that, since all agreements are contingent on the Coal & Allied deal succeeding, the impending Rio Tinto decision will determine the future owner of their minority stake in the project.