Mitsubishi Corporation

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June 13, 2017
Mitsubishi Corporation

Mitsubishi Corporation has Reached Agreement to Sell its Interests in the Hunter Valley Operations and Warkworth Coal Mines in Australia

Mitsubishi Corporation (MC) hereby makes an announcement in relation to its interests in the Hunter Valley Operations (HVO) and Warkworth (WW) coal mines in Australia.  MC currently holds a 32.4% and 28.9% ownership interest in HVO and WW, respectively, through its wholly owned subsidiary Mitsubishi Development Pty Ltd (MDP).
Following Rio Tinto’s agreement to sell 100% of its shares in Coal and Allied Limited (C&A) to Yancoal Australia Ltd (Yancoal), MC has been in discussion with Yancoal in respect of its tag along right*¹ triggered by this transaction.  MC received an offer from Yancoal for it to purchase MC’s interest in HVO for the amount of U$710 million and MC has now accepted this offer. MC has also agreed to grant Yancoal a call option over MC’s 28.9% interest in WW requiring MC to sell for the amount of U$230 million in connection with the agreement to sell its HVO interest.
Separately, Glencore has made a proposal to MC for Glencore’s purchase of its HVO and WW interest at the price of U$920 million, in connection with Glencore’s offer to Rio Tinto to purchase all of the shares in C&A.  MC has accepted the proposal, subject to Glencore successfully completing the acquisition of C&A.
Based on its mid-term strategic plan, MC has been taking steps to improve its asset portfolio without increasing its overall investment balance, particularly as it relates to its mineral resources investment business.  In line with this strategy, MC has agreed to sell both its interests in HVO and WW to whichever party (being either Yancoal or Glencore) that ultimately becomes the successful purchaser of all of the shares in C&A.
In addition to the divestment of its ownership interest in HVO and WW, MC has also reached an agreement with Yancoal on exclusive thermal coal sales agency arrangements for the Japanese market.  Through our mineral resources trading division, MC will continue to contribute to the stable supply of thermal coal to power utilities in Japan and more broadly across Asia, where overall demand for thermal coal is expected to grow.  MC has agreed separate arrangements with Glencore regarding the Japanese market.
*1. MC’s right to sell its interest in HVO to the third party to which Rio Tinto sells its share of C&A.
<Ownership structure of HVO and WW before the transaction>
Reference Information
1. About Mitsubishi Corporation:
1) Head Office : 3-1, Marunouchi 2-Chome, Chiyoda-Ku, Tokyo 100-8086, Japan
2) Main Business : Mitsubishi Corporation is a global integrated business enterprise that develops and operates business across virtually every industry including industrial finance, energy, metals, machinery, chemicals, foods, and environmental business. Mitsubishi Corporation’s current activities are expanding far beyond its traditional trading operations as its diverse business ranges from natural resources development to investment in retail business, infrastructure, financial products and manufacturing of industrial goods.
3) Representative : Takehiko Kakiuchi, President and CEO
4) Establishment : 1954
2. About Rio Tinto:
1) Head Office : 6 St James's Square London SW1Y 4AD United Kingdom
2) Business : Rio Tinto has been one of the top mining companies in the world, with
a range of mining activities including aluminium, copper, diamonds, gold, industrial minerals, iron ore, thermal and metallurgical coal and uranium. Under their group-wide organizational structure, their four product groups – Aluminum, Copper & Diamonds, Energy & Minerals and Iron Ore – are complemented by their Growth & Innovation group.
3) Representative : Jean-Sébastien Jacques, Chief Executive Officer
4) Establishment : 1873
3. About Yancoal Australia:
1) Head Office : Level 26, 363 George Street, Sydney, NSW 2000, Australia
2) Business : A major thermal coal producer in Australia.
3) Representative : Reinhold Schmidt, Chief Executive Officer
4) Establishment : 2004
4. About Glencore:
1) Head Office : Baarermattstrasse 3 Baar, CH-6340 Switzerland
2) Business : Glencore is one of the leading mining and commodities trading companies in the world, with a range of mining activities including copper, coal, zinc and nickel. Glencore’s business covers over 90 commodities encompassing metals & minerals, energy products and agricultural products as well as related marketing and logistics activities.
3) Representative : Ivan Glasenberg, Chief Executive Officer
4) Establishment : 1974

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