China-owned Yancoal Australia is set to acquire a stake in a coal export terminal at Port of Newcastle as part of Rio Tinto's A$2.69 billion ($2.07 billion; €1.81 billion) sale of its Australian coal assets.
The latter includes majority interests in three mines as well as a 36.5 percent stake in Port Waratah Coal Services, which owns a coal export terminal at Port of Newcastle, among other undeveloped coal assets.
Port Waratch Coal Services operates a coal handling business in New South Wales, with total assets of A$1.7 billion as of last December.
It loaded 109 million tonnes of coal in 2016 and 50 percent of its exports went to Japan, according to its 2016 annual report. The output was also sent to Taiwan (13 percent), South Korea (12 percent) and China (12 percent). The rest was distributed to other unnamed regions.
Once the transaction is completed, Yancoal will become the largest independent coal operator in Australia and a major coal supplier to Japan and South Korea. That will allow it to have a big say in negotiations and price setting in the Asia-Pacific seaborne coal market, according to Yanzhou Coal, the Hong Kong-lasted parent of Yancoal.
The Chinese state-owned miner proposed to buy Coal & Allied Industries, Rio Tinto's wholly owned subsidiary of Australian thermal coal assets, in January with an initial offer of A$2.45 billion. Earlier this month, Anglo-Swiss mining company Glencore submitted a rival bid of A$2.55 billion, which was followed by an improved offer of A$2.69 billion from Yancoal this week.
Rio Tinto shareholders have voted in favour of the decision to sell the firm's Australian assets to Yancoal Australia, in view of the high level of completion certainty and a further improved offer.
The seller said last week that Yancoal has received or will waive the regulatory green lights it needs to close the deal, which include approvals from China's National Development and Reform Commission, State-owned Assets Supervision and Administration Commission of the State Council, and Ministry of Commerce and the State Administration of Foreign Exchange; it has also been cleared by the Foreign Investment Review Board, the Australian Competition & Consumer Commission and the NSW Minister for Resources.