May 6, 2017 - The sale of two Rio Tinto coking coal mines in Australia is attracting scores of interested buyers as private equity and public companies compete for a foothold in one of the year's hottest commodities, four sources familiar with the matter said on Friday.

Rio Tinto is expected to soon begin an official sales process for the Hail Creek and Kestrel mines in coal-rich Queensland state, which is bringing "an unprecedented number of people to the table," said one source, whose company is interested in the assets.

Analysts expect each of the mines to sell for more than $2 billion and complete Rio Tinto's exit from Australian coal mining after it agreed in January to sell its Coal & Allied thermal coal division to China's Yancoal Australia for $2.45 billion.

"There's a lot of interest in a limited number of opportunities in Australian coking coal and that's driving the frenzy for Hail Creek and Kestrel," the source said, speaking on condition of anonymity.

Rio Tinto has not formally announced the sale, but has said it is exiting coal as its focuses on growth in iron ore, copper and its aluminum division. The company declined to comment on whether it was taking offers on the two Australian mines.

Australian coking coal is sold mostly to steel mills in Asia. Prices SCAFc1 jumped to half-decade highs late last year on pinched supplies in China and surged again last month after an Australian cyclone disrupted shipments, underscoring the strong demand for high quality coal.

A private equity executive, who has previously bought Australian coal assets, said he expected to face "stiff competition" from other private equity groups for the Rio Tinto mines.

Credit Suisse is advising Rio Tinto, a third source said. Credit Suisse declined to comment.

Buyers are also looking at mines put up for sale by other companies, including conglomerate Wesfarmers, and Peabody Energy. Anglo American also said a year-and-a-half ago it would exit coal mining as part of a restructuring to pay off debt, but has yet to announce a formal sale since coal prices staged a recovery.

Barry Tudor, a former mining chief executive and head of private equity group Pembroke Resources, said the recovery in prices had removed the urgency of a sale for some companies, with mine owners happy to run their operations for cash.

Pembroke last year ago paid A$104 million for three mine tenements from Peabody and was looking for more mines to feed long-term demand from Asia.

"We now have a mandate to specifically find more coking coal assets in Australia," said Tudor, although he declined to comment on whether Pembroke would look at the two Rio mines.

Until Rio Tinto turned seller, the biggest deal pending was Wesfarmers' sale of its Curragh mine and its 40 per cent interest in the Bengalla mine. Wesfarmers Chief Executive Richard Goyder said last week his company has been culling approaches.

"We are working through a reduced number of parties on both assets, details of what's on the table," Goyder said. "The process isn't simple and it will not be short, if indeed anything comes of it."

Offers could also come from mining companies seeking to beef up their coal portfolios or diversify into the sector.Jim Beyer, managing director of iron ore miner Mt Gibson Iron Ltd said this week coking coal mines in Australia would fit his company's diversification plans into other commodities.

"Coking coal is a business we have been looking at," Beyer said. "There are quality assets out there, but they are very competitive and limited," he said, adding that Mt Gibson was also looking at base metals and other commodities.