Glencore PLC and a group led by Apollo Global Management LLC are among bidders set to be shortlisted for the sale of Rio Tinto Group’s last remaining coal mines, which could fetch more than A$2 billion (US$1.5 billion), people familiar with the matter said.
Whitehaven Coal Ltd and South32 Ltd also made indicative offers for Australia’s Hail Creek and Kestrel mines by the deadline this month, the people said, asking not to be identified because the information is private.
The parties, which also include EMR Capital Advisors Pty, are preparing to enter the second round of the sale process, which is to include management presentations and site visits, before deciding on final bids, the people said.
A sale would allow Rio, the world’s second-biggest miner, to complete its exit from coal and continue an asset divestment program that has returned more than US$7 billion since 2013.
This year it agreed to sell US$2.69 billion of Australian mines to a company controlled by China’s Yanzhou Coal Mining Co (兗州煤業), and CEO Jean-Sebastien Jacques in September said a rebound in metals and energy prices has opened a window for additional sales.
Representatives for Rio Tinto, Whitehaven, EMR Capital and Glencore declined to comment.
A spokesman for South32 said in an e-mailed response that the company is continuing to focus on identifying new opportunities outside its portfolio.
He declined to comment on the Rio Tinto assets.
New York-based Apollo is bidding with Xcoal Energy & Resources LLC and Canada Pension Plan Investment Board (CPPIB), the people said.
A representative for Xcoal Energy did not respond to queries, while Apollo and CPPIB declined to comment.
Rio Tinto controls 82 percent of Hail Creek in the Bowen Basin region of Queensland. The mine can produce as much as 10 million tonnes of coal per year, the firm’s Web site says.
It owns 80 percent of Kestrel, which produced 5 million tonnes of coking and thermal coal last year.
The sale process, being run by Credit Suisse Group AG, also includes the Valeria and Winchester South coal projects in Queensland, people familiar with the matter said in October.
A representative for Credit Suisse declined to comment.
Rio Tinto shares rose 1.3 percent by 8:06am yesterday in London and touched the highest since the middle of last month.
Glencore added 0.4 percent.
Rio Tinto in September boosted estimates of coal reserves at Kestrel by 62 million tonnes to 185 million tonnes, an exchange filing showed.
The Valeria project is a semi-soft coking coal and thermal coal deposit close to Kestrel, while Winchester South is a coking coal asset in central Queensland.
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