RAC and ZAC used to belong to Riversdale, who used the cash flow from ZAC to explore for coking coal in Mozambique.
Rio took out Riversdale for around $4 billion, primarily for the coking coal. (all off the top of my head, so check it out if you want to be certain).
Ian suggested that ZAC's best days were likely behind it, so my guess is that rio was using the output from ZAC for it's own internal purposes, but probably was beginning to struggle to come up to spec. Probably then little point in Rio to continue to hold such a relatively small asset.
HWK Price at posting:
9.0¢ Sentiment: Buy Disclosure: Held
