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Rio Tinto reconfirms Yancoal as the preferred buyer of its thermal coal assets in Australia

The Rio Tinto board has reconfirmed its recommendation that shareholders vote in favour of the sale of its wholly-owned subsidiary Coal & Allied Industries Limited (“C&A”) to Yancoal Australia Limited (“Yancoal”). The recommendation follows consideration by the board of a counter proposal from Glencore plc (“Glencore”) and a proposal from Yancoal comprising improved terms to the transaction previously announced.

Rio Tinto has engaged in active discussion with both parties and the board assessed a number of factors in its consideration of both proposals, including price and value; the risk that regulatory approvals will not be granted, or will be significantly delayed; funding certainty; and deal execution timeline. The board is recommending Yancoal’s proposal to its shareholders based on:

  • Yancoal’s agreement to accelerate all deferred payments and make a single payment of $2.45 billion at completion to purchase the C&A assets plus coal price-linked royalty.
  • Additional information and confirmations regarding Yancoal’s funding plans.
  • Receipt of confirmation from Yancoal that it has received or will waive all the regulatory approvals that are conditions precedent to its ability to close, including Chinese regulatory approvals from...