Rio completes Australia coal mines sale to China's Yancoal

Mining giant Rio Tinto has wrapped up the sale of most of its Australian coal assets to Yancoal, with the China-backed firm taking control of the business on Friday.

Rio, the world's second-largest miner, which is dual-listed in Britain and Australia, banked US$2.45 billion in cash with a further US$240 million due in royalty payments.

With its Coal & Allied operations transferring to Yancoal, Rio said its 2017 thermal coal production had been revised down to 13-14 million tonnes, from 17-18 million tonnes previously.

Yancoal, majority-controlled by China's Yanzhou Coal, was preferred despite a higher bid by Glencore.

The Chinese company had already won approval from Australia's Foreign Investment Review Board, while the Swiss commodities giant still needed the regulatory green light.

Rio, which in February reported a surge in annual net profit thanks to improving commodity prices, is selling Coal & Allied in a divestment drive that analysts expect will lead to a complete exit from the coal sector.