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NEWS - THIS MONTH IN COAL 26 E&MJ; • JULY 2017 www.e-mj.com Rio Tinto Agrees to Sell C&A; to Yancoal After receiving a competitive bid from Glencore and a counter offer from Yancoal, Rio Tinto has ultimately decided to sell its wholly-owned subsidiary Coal and Allied Industries Ltd. to Yancoal. Rio Tinto said it felt Yancoal Australia Ltd.'s offer of $2.69 million had a higher level of completion certainty. The sale is still contingent on a vote by the company's shareholders. The recommendation follows consider- ation by the board of a revised offer from Glencore plc received on June 23, and a revised offer from Yancoal received on June 25 comprising further improved terms. Yancoal's most recent offer includes total consideration of $2.69 billion, compris- ing $2.45 billion in cash payable in full on completion, as well as $240 million via unconditional guaranteed royalty payments of which $200 million will be received be- fore the end of 2018. It also includes an increased break fee amount provided by Yancoal's parent company, Yankuang, from $100 million to $225 million and the re- ceipt or waiver of all regulatory approvals required to close the transaction. The board considered both of the lat- est offers and recommended Yancoal's improved offer to its shareholders based on greater transaction certainty and higher net present value. In detail, the Yancoal offer has a faster and more certain time- table, with the deal expected to complete during the third quarter of 2017, whereas any transaction with Glencore is unlikely to complete until the first half of 2018 at the earliest. Given the uncertainty of receipt of certain cash flows under Glencore's revised terms, the Yancoal offer presents greater net present value, Rio Tinto said. "The revised offer from Yancoal of $2.69 billion offers compelling value to our shareholders for our Australian ther- mal coal assets," said Rio Tinto Chief Ex- ecutive J-S Jacques. "This sale process has been in progress for a long period of time and we believe it is in the best inter- ests of our shareholders to take the great- er certainty of Yancoal's strong proposal." Rio Tinto initially agreed to sell C&A; to Yancoal on January 24, which includ- ed $1.95 billion cash, payable at com- pletion plus a coal price-linked royalty; and $500 million in aggregate deferred cash payments, payable as annual instal- ments of $100 million over five years fol- lowing completion. On June 9, Glencore submitted a pro- posal to acquire C&A; for $2.55 billion comprising. Then on June 20, Rio Tinto announced it had agreed to improved terms for the sale of C&A; to Yancoal for $2.45 billion cash payable at completion. On June 23, Glencore submitted a revised proposal for $2.675 billion cash payable at completion; the greater of post-tax cash flows of C&A; and $25 million net of tax per month between September 1, 2017, and March 31, 2018, subject to a number of significant qualifications and excep- tions; and a coal price-linked royalty. The offer was subject to regulatory approvals from Australia, China, Korea and Taiwan. Clean Coal Technologies Signs Agreement for Pristine M Plant in Wyoming Clean Coal Technologies Inc. (CCTI), an emerging cleaner-energy company using technology to convert untreated coal into a cleaner burning and more efficient fuel, announced they have signed a binding agreement with Wyoming New Energy Corp. (WNEC) for the build-out of its first commercial facility in Wyoming. WNEC has recently entered into an en- gagement agreement with Piper Jaffray to raise up to $80 million in debt financing to build a 2-million-ton CCTI Pristine M Plant in the Powder River Basin. "We are excited about the opportuni- ty to support WNEC and pursue funding for the use of CCTC's advanced technol- ogy for processing coal and waste coal in what we hope is this first of many such projects," said George Longo, managing director and lead project finance banker at Piper. "We appreciate being a support- er of our client's monetization of an abun- dant U.S. energy resource." "This is a U.S.-designed, engineered and tested technology and we are very pleased to see it deployed here in the U.S., where we will continue to work with Wyoming on additional agreements and locations," said COO Aiden Neary. "We are working with Kiewit in completing some additional client-requested tests at our test facility in Oklahoma. This will also enable Kiewit to design the first com- mercial module. "The financial support from Piper Jaf- fray echoes not only confidence in the Pristine M technology, but also confi- dence in the U.S. coal industry. The local knowledge from WNEC should ensure a seamless commercial build-out." "U.S. government and private finance will encourage our overseas interests from Rio Tinto's Kestrel mine (above) in Queensland is one of several coal operations Yancoal will acquire in the Coal & Allied transaction.