BHP spinoff South32 is said to be interested in buying Rio Tinto’s $2 billion Queensland coal assets, with a report suggesting it has hired Bank of America Merrill Lynch to help coordinate the bidding process.
According to a speculative report in The Australian, South32 is said to have hired the financial adviser, a fortnight after it was first rumoured to be interested in the mining assets.
Rio is reportedly working with Credit Suisse to divest its Kestrel and Hail Creek coking coal mines.
Potential bidders were given preliminary information earlier this month, and has asked for indicative bids by early December, according to Bloomberg.
South32 will likely with Whitehaven Coal, among other suitors, in the bidding process, according to reports.
But the ASX-listed BHP spinoff is said to be taking a hard look at how much exposure it allows itself to have to the coal industry. Its coking coal output dropped in the September quarter, after part of its Illawarra mining operations were shut down during the period due to safety issues.
South32 also generates revenue mining metallurgical coal, manganese, base metals, aluminium, alumina and precious metals.