Milner Glencore has announced the sale of Glencore Rail (Grail), its coal haulage business in Australia to Genesee & Wyoming Australia (GWA), for AU$1.14bn. “We established GRail in 2010 and have steadily grown it to become the third largest coal haulage business in the country,” said Peter Freyberg, head of Glencore’s global coal assets. “It has played a very important role in reducing costs and improving the overall efficiency of Australia’s largest coal chain in the Hunter Valley. We are very pleased with the outcome of the sale process and look forward to continuing our constructive working relationship with Genesee & Wyoming in the years ahead.”
The global mining company said the sale would help reduce its debts, and is seeking other opportunities to do the same with other businesses. It is reported that Glencore will try to sell-off its Vasilkovskoye gold mine in Kazakhstan. Glencore has had to offer a number of businesses this year, in a bid to reduce its $100 billion of debt. The mining industry has had a tough few years, but the FTSE100 listed company hinted earlier in the quarter that it might be able to pay dividends in 2017.
As part of the deal, GWA will have a 20-year contract with Glencore to supply their coal haulage requirements from the Hunter Valley to their export centre at the Port of Newcastle.