June 24, 2017 - Rio Tinto has selected Yancoal as a preferred buyer of its Coal & Allied Industries for up to $2.45bn, rejecting a counterbid launched by Glencore for its Australian unit.

Earlier this month, Swiss-based mining company Glencore announced that it is willing to pay $2.55bn for Rio Tintos thermal coal assets in Australia, challenging a takeover offer made by Chinese government-controlled Yancoal Australia six months ago.

Rio Tinto said that has engaged in active discussion with both parties and assessed a number of factors in its consideration of both proposals to make a final decision on the offers.

The decision is based on Yancoals agreement to speed up all deferred payments and make a single payment of $2.45bn to purchase Rio Tintos coal assets, it said.

Besides, uncertainty over Glencore securing clearance from various jurisdictions in a timely manner has led Rio Tinto to opt Yancoals offer.

On the other hand, Yancoal has already received an approval from the Australias Foreign Investment Review Board (FIRB) and Chinese authorities.

Rio Tinto chief executive J-S Jacques said We believe Yancoals offer to purchase our thermal coal assets for $2.45 billion offers the best value and greater transaction certainty for shareholders.

Yancoals revised offer is the most attractive because it removes the deferred payment structur e, can meet the timeline we have set for the transaction, and has given us certainty regarding the outstanding regulatory approvals required.

Coal & Allied Industries unit owns and operates multiple, multi-seam open cut mines in the Hunter Valley region of New South Wales as well as export infrastructure.

It owns 67.6% stake in the Hunter Valley Operations mining complex, 80% interest in the Mount Thorley mine, 55.6% in the Warkworth mine and other undeveloped coal assets, including various landholdings.

The firm also has 36.5% stake in Port Waratah Coal Services, a coal export terminal located at the Port of Newcastle.