Rio Tinto reached a binding agreement for the sale of its 40% interest in the Bengalla joint venture in Australia to New Hope Corp. Ltd. for $606 million. Bengalla is the smallest of three coal mines in the Hunter Valley of New South Wales in which Rio Tinto holds an interest, producing 8.6 million metric tons (mt) in 2014.

Rio Tinto and Mitsubishi Development have recently agreed to a simplification to the ownership structure of Coal & Allied, which helps enable this transaction. The transaction is subject to certain conditions precedent being met, including the pre-emption rights of the Bengalla joint venture partners.

The sale of the interest in the Bengalla joint venture is expected to close in the first quarter of 2016.

New Hope currently has two open-cut coal mines in South East Queensland that produce thermal coal: New Acland, north of Oakey, and Jeebropilly in the near Ipswich. Total clean coal production from these operations is about 7 million mt. More than 90% is directly sold to export markets, predominantly in the Asia Pacific region.

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