AFTER announcing it will slash 14,000 jobs and cut debt by $14bn by the end of 2009, Rio Tinto is rumoured to be selling a key stake of its coal unit to China Shenhua Energy.
China Shenhua, the country’s largest coal miner, is planning to bid for Rio’s 76% stake in Coal & Allied Industries, which runs three operations in NSW.
Analysts say the $5.4bn unit could be a “good move” for Shenhua to secure long-term assets and diversify its source of resources.
Rio Tinto is said to be feeling the pressure of its debt load, brought on by it’s $57bn purchase of Alcan in 2008. The company is cutting its capital expenditure by more than half, seeking buyers for a host of its assets, and has already slashed its iron ore production estimates for 2008/9.
Bankers and analysts say BHP, Vale, and Chinalco are all eyeing Rio's diverse collection of assets. Other likely bidders for Coal & Allied include Mitsubishi and Switzerland's Xstrata.
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