X2 Resources Reportedly In Talks To Buy Rio Tinto's Coal Assets In Australia

(RTTNews) - X2 Resources, the private-equity firm founded by former Xstrata Chief Executive Officer Mick Davis, is in talks to buy Rio Tinto's (RTPPF.PK, RIO.L, RIO, RTNTF.PK) controlling stake in three Australian coal mines, reports said citing two people familiar with the matter.

According to the reports, the negotiations are at an early stage and any deal, which may fetch $2 billion to $4 billion, could take two months to finalize. The Rio mines in New South Wales have positive cash flow, despite the current coal-price slump.

Ivan Glasenberg, the CEO of Glencore Plc, reportedly explored a potential deal with Rio for the mines, including forming a joint venture, about a year ago. Rio and Glencore, which bought Xstrata in 2013, haven't reached a deal.

The three Rio mines -- Bengalla, Hunter Valley Operations and Mount Thorley Warkworth -- are near assets owned by Glencore. Rio owns 80 percent of the three properties, with the rest controlled by Mitsubishi Corp., the Japanese trading house.