rio to sell

As taken from the Border Morning Mail, Firday 25 June.

Coal reserves at Oaklands are set to be sold by Rio Tinto sunsidiary Coal and Allied Industries and could fetch $150 million.

The depsoit, estimated at 1.3 billion tonnes, has previously been considered for a coal fired power station and lies under paddocks south of the adjoining Coalworks Ltd site.

Coal and Allied confirmed yesterday that it is in the process of assessing the potential sale of its undeveloped Oaklands desposit, which is held on an assessment lease.

Corporate advisers have been engaged to help the process but the company is saying little beyond promising to provide further advice when appropriate.

Coal and Allied's deposit was investigated at length in the 1980's when it was owned by a CRA-Mitsubishi joint venture.

Tenative plans were drawn up for a coal fired power station but it did not eventuate.

Rio Tinto bought Mitsubishis share of the joint venture in 1999.

Last year it moved it focus to its coal projects in the Hunter Valley mines by divesting other assets.

In February, Rio sold it Maules Creek deposit for $480 million to Aston Resources, the deposit between Tamworth and Narrabri having been acquired at the same time as Oaklands in 1999.

Coalworks plans were revealed in June 2008, and its investigations have provided encouraging signs.

This month, a report from US based experts enhanced the chances of Oaklands coal being turned into petrol by a gasification process for Australian and overseas markets.

Coalworks welcomed Victoris's recent $17 million upgrade of its Oaklands to Benalla railway as it has plans to ship Coal product overseas, possibly to China.

In March, Coalworks claimed a petrol project could generate $200 million a year but studies have a long way to go before it determines if the project is feasible.

It could take 300 workers to create an open cut mine.