Shenhua to Bid for Stake in Rio Coal Unit, Morning Post Says

By Joost Akkermans

Jan. 12 (Bloomberg) -- China Shenhua Energy Co. plans to bid for a stake in a coal unit Rio Tinto Group is putting up for sale, the South China Morning Post reported, citing people it didn’t identify.

Rio is seeking interest for the majority holding it owns in Coal & Allied Industries, which runs operations in Australia’s New South Wales, the English-language Hong Kong-based newspaper said today. The stake is worth about $3.72 billion, according to the Morning Post.

Likely buyers of the stake, which include Mitsubishi Development Pty and Xstrata Plc, want Rio to include its coal assets in Queensland in a transaction, according to the newspaper. Mitsubishi is the second-largest shareholder in Coal & Allied and has change of control rights, it said.

China Shenhua Energy is the Hong Kong-listed unit of Shenhua Group Corp., China’s biggest coal producer, and Rio Tinto is the world’s third-largest mining company.

To contact the reporter on this story: Joost Akkermans in Hong Kong at jakkermans@bloomberg.net