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Glencore continues coal acquisition spree in $1.7 billion deal with Rio Tinto
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Glencore announced it had agreed to purchase Rio Tinto's 82% interest in the Hail Creek coal mine and 71.2% interest in the Valeria thermal coal project in Queensland for US$1.7 billion in cash. Assuming a zero valuation for the Valeria project, we estimate the deal was struck at a 41% premium to our valuation of Hail Creek. We estimate consideration payable results in a deal-implied long-term real 2018$ benchmark export hard coking coal and thermal coal prices of US$146/tonne (FOB Qld) and US$83/tonne (FOB Newcastle) respectively.
Table of contents
- Overview
- Deal summary
- Hail Creek
- Valeria
- Deal Analysis
- Strategic rationale, upside and risks
Tables and charts
This report includes the following images and tables:
- Deal summary
- Location map
- Marketable reserves (as at 1 July 2018)
- Hail Creek coal export sales by coal type and destination FY17 (million tonnes)
- Metallurgical coal sales share FY17 (%)
- Thermal coal sales share FY17 (%)
- Summary valuation
- Valuation metrics
- Economic assumptions
- Deal implied prices move higher on recovery in metallurgical coal prices
- Thermal deal implied prices also moving higher
- Glencore Australian pro-forma production profile - metallurgical coal
- 3 more item(s)...
What's included
This report contains:
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