Rio Tinto has entered into a binding agreement with a consortium comprising private equity manager EMR Capital (EMR) and PT Adaro Energy, an Indonesian listed coal company, for the sale of its entire 80% interest in the Kestrel underground coal mine in Queensland, Australia, for $2.25 billion.   Rio Tinto chief executive J-S Jacques said “The sale of Kestrel, together with the announced divestments of Hail Creek and our undeveloped coal projects, delivers exceptional value to our shareholders and will leave our portfolio stronger and more focused on delivering the highest returns through targeted allocation of capital.

“I would like to thank the many people at Rio Tinto and the communities where we operate, whose hard work and commitment has contributed to the success of the coal business over many years. I wish them continued success under new ownership.”

Subject to all regulatory approvals and other conditions precedent being satisfied, completion is expected to occur in the second half of 2018. It will bring the total amount achieved from the recent divestments of Rio Tinto’s Queensland coal assets to $4.15 billion, with the funds to be used for general corporate purposes.

The Kestrel mine is located in the Bowen Basin, 40km northeast of Emerald in central Queensland, Australia. Kestrel employs longwall mining to produce high quality coking and thermal coal products for export markets.

In 2017 the Kestrel mine produced 5.1 Mt of saleable coal, comprising 4.25 Mt of hard coking coal and 0.84 Mt of thermal coal. At 31 December 2017, Rio Tinto reported marketable reserves for Kestrel of 146 Mt and mineral resources of 241 Mt.

In 2017 Kestrel generated EBITDA of $341 million and profit before tax of $258 million, being Rio Tinto’s attributable share. Rio Tinto’s share of gross assets at 31 December 2017 was $1,441 million.