Rio Tinto offloads Australian thermal coal project for $224m

Rio Tinto has agreed to sell its Mount Pleasant thermal coal project in Australia for an initial $83m rising to $224m (£156m) plus future royalties.

With the recently announced binding agreement for the sale of Rio Tinto's interest in the neighbouring Bengalla coal joint venture, this amounts to US$830m of agreed sales.

Buyer MACH Energy will pay $83m on completion of the Mount Pleasant deal anticipated in the second quarter once regulatory approvals are met, with two unconditional deferred payments of $58m each payable eight and 16 months from completion, and a conditional payment of $25m.

Mount Pleasant is situated in the Hunter Valley of New South Wales and has total marketable reserves of 474m tonnes.

Rio Tinto's copper and coal chief executive Jean-Sébastien Jacques said: "These agreements for over US$800 million in asset sales deliver significant value for our shareholders, with the potential for future royalties from Mount Pleasant.

"We believe Mount Pleasant can have a very positive future under its new owners with different priorities for development and capital allocation."

Rio Tinto has now announced or completed $4.7bn of divestments since January 2013.