By Nathan Richardson and Wendy Wells

March 22, 2018 - Mining giant Rio Tinto has agreed to sell its 75% interest in the Winchester South coal development project in the Australian state of Queensland to Whitehaven Coal for $200 million, the two companies said Thursday. 

Whitehaven said the large, high quality coking coal project in the Bowen Basin was located near tier one operating mines including Moranbah, Grosvenor and Peak Downs. 

"Winchester South will form a key part of the company's longer term growth plan," Whitehaven Coal managing director and CEO Paul Flynn said in a statement.

The project has the potential for an open cut mine life of 20-30 years with significant exploration potential, ROM coal production of 2.5 million-15 million mt/year, product coal in the range of 3.5 million-7.5 million mt/year, and a product mix including hard coking coal, semi-hard coking coal, semi-soft coking coal and thermal coal, Whitehaven said. 

Coal from the project could be delivered by rail to either Dalrymple Bay Coal Terminal or the Port of Gladstone for export, it added. 

The transaction remains subject to regulatory approvals. 

Rio Tinto earlier in the week agreed to sell its 82% interest in the Hail Creek coal mine and 71.2% interest in the Valeria coal resource in Queensland to Glencore for $1.7 billion.

A separate process remains underway to sell its remaining Australian coal asset, an 80% interest in the Kestrel underground mine Queensland, Rio Tinto said.  

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