THE Hunter coal industry will have its biggest shake-up in years if Rio Tinto proceeds with apparent plans to sell down its stake in Coal & Allied.
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The sale plans affect three open-cut mines – Hunter Valley Operations, Mount Thorley/Warkworth and Bengalla – as well as coal-loader operator Port Waratah Coal Services.
Among them, the four businesses employ nearly 3000 people.
While Rio has not officially confirmed the sale plan, it has repeatedly declined the chance to hose down speculation triggered late last week by the Wall Street Journal.
According to the Journal, Rio has hired Deutsche Bank to help it sell a 29per cent stake in C&A and offload two thermal coalmines in Queensland, raising up to $3billion all up.
Rio owns C&A in an 80/20 split with Mitsubishi.
C&A owns all of Hunter Valley, 80per cent of Mount Thorley/Warkworth and 40per cent of Bengalla.
C&A also has about 35per cent of Port Waratah Coal Services (PWCS), which operates loaders at Carrington and Kooragang Island and is planning the T4 loader project.
Two years ago the entire C&A operation was valued at more than $10billion but coal prices have fallen by more than one-third since then and Rio is apparently prepared to take a loss on the sale.
Given the chance yesterday to reject the Journal report, Rio spokesman Matthew Klar said the company’s only statement was that it ‘‘would not respond to market speculation’’.
PWCS chief executive Hennie du Plooy also declined to comment on an ‘‘individual producer matter’’.
Forestry, Mining and Energy Union district president Peter Jordan said he was not surprised at the company’s silence, saying, ‘‘Rio never like telling people what they are doing’’.
‘‘The feedback from our members has been that they’d be overjoyed if someone took the mines over from Rio,’’ Mr Jordan said.
New Rio Tinto chief executive Sam Walsh announced a cost-cutting program as soon as he took over in January from Tom Albanese, whose purchases made at the top of the market have left the company with overpriced assets and project write-offs.
Rio recently told contractors at its Hunter Valley mines to cut their prices by 20per cent, and new labour hire contracts have been written in some areas as a result.
