Glencore in Hunter Valley coal tie-up talks with Rio Tinto

Swiss commodity major Glencore Xstrata is in talks with miner Rio Tinto over a coal production tie-up in Australia’s coal-rich Hunter Valley in a bid to boost profitability.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

Glencore ceo Ivan Glasenberg confirmed that the trading house was in talks with Rio Tinto in a call to investors accompanying the company’s 2013 full-year financial results on Tuesday March 4.

“There are a lot of synergies between us and Rio Tinto with the Hunter Valley assets,” Glasenberg said.

“We’re talking to Rio and it takes time for both sides to assess each other’s assets. How far we will get and how soon we will reach an agreement, I don’t know. It certainly makes sense,” he added.

Rio Tinto declined to comment.

Coal prices have tumbled in the past year, dropping by about 25% in 2013. Steel First’s spot premium hard coking coal index cfr China has dropped from just under $160 per tonne in early November to $134 per tonne on March 4.

In the face of falling coal prices and following a $4 billion writedown across its energy business in 2012, Rio Tinto has moved to streamline its coal assets. It put 29% of its Coal & Allied business, which owns its Hunter Valley semi-soft coking coal and thermal coal mines, up for sale last year.

The miner sold its Clermont and Blair Atholl thermal coal mines in 2013 and its coking coal operations in Mozambique, bought from Riversdale mining in 2011 for $3 billion, are also understood to be up for sale.

Glencore owns a number of mines in the Hunter Valley region, including Mt Owen, Ravensworth East and Glendell.

The company saw coking coal sales volumes in 2013 increase by 15% to 4.2 million tonnes, but higher sales volumes were offset by lower realised prices for the product.

What to read next
Following a six-week consultation period, Fastmarkets can confirm it will amend the calculation method for all the average functions on the Fastmarkets platform from Wednesday March 1, 2023.
Consolidation, the recycling of electric vehicle batteries, US steel exports and the benefits of sustainable steelmaking were key talking points at Fastmarkets’ Scrap & Steel 2023 conference in Dallas in January
Green shoots of increased demand will emerge in US ferrous markets courtesy of the Biden administration’s trillion-dollar infrastructure package in 2023, Schnitzer’s executive vice president and chief strategy officer Richard Peach said at Fastmarkets’ Steel and Scrap Conference 2023 in Dallas, Texas
US special bar quality steel prices rose in January in line with rising scrap and alloy costs, according to market participants
European metal industry association Eurometaux has called on the European Commission to follow the lead shown by the Inflation Reduction Act and deliver a “powerful” policy to support the industry in the EU while it tries to keep up with the move to a new generation of energy markets
The fallout from Russia’s invasion of Ukraine is changing global trade flows for bauxite, with Brazilian material once again flowing into China and with the introduction of export restrictions elsewhere likely to influence availability through 2023
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
Proceed