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Rio's Australia thermal coal assets on market

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(Globalpost/GlobalPost)

Anglo-Australian mining giant Rio Tinto will put parts of its struggling Australian thermal coal mine operations up for sale, hoping to raise US$3 billion, reports said on Thursday.

The Australian Financial Review said the company has hired Deutsche Bank to examine the sale of its stakes in the Clermont and Blair Athol mines in Queensland state and its Coal and Allied operation in New South Wales.

The Australian newspaper reported that Japanese power suppliers would be the most obvious buyers, with Rio keen to offload poorly performing assets.

Rio refused to confirm or deny the sales, but they would fit with comments by new chief executive Sam Walsh in February that the company was targeting cash savings of more than US$5.0 billion by the end of 2014.

"My immediate priority is to build more focus, discipline and accountability throughout the organisation," said Walsh, promising "aggressive" cost-cutting.

"Demonstrating this commitment, we will deliver our capital reduction and cost savings targets and improve performance across our business."

His comments followed Rio in February posting its first annual loss in 18 years, with the mining giant plunging US$2.99 billion into the red on hefty writedowns on its Mozambique coal and aluminium businesses.

The US$14.4 billion in impairments, announced in January, prompted the resignation of chief executive Tom Albanese, with Walsh taking his place.

A slowdown in China and debt strains in Europe and the United States have weighed on mining companies in the past 12 months, with projects delayed or shelved as commodity prices have plunged on a drop in demand.

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http://www.globalpost.com/dispatch/news/afp/130403/rios-australia-thermal-coal-assets-market