Mining and Heavy Industries

Winter gets Indonesian backer in battle for Rio’s coal assets

Indonesia’s biggest conglomerate the Salim Group is rumoured to be the financial backer for former Tinkler executive Scott Winter, in a pending bid for a selection of Rio Tinto coal mines.

The AFR’s Street Talk column this week reported that Winter, who used to work with former coal magnate Nathan Tinkler, is sizing up several of Rio’s coal assets in New South Wales, including the Mount Pleasant thermal coal project.

Salim Group owns a number of food, telecom, retail, property and banking businesses. Perhaps its best-known business is Indofood Sukses Makmur, the world’s largest producer of instant noodles, including the well-known ‘Mi goreng’ instant noodle brand.

Salim Group also owns 45% of Hong Kong investment firm First Pacific, which in February bought Australian food manufacture Goodman Fielder for $1.3bn.

Salim Group’s chairman, Anthoni Salim, was listed on Forbes’ Indonesian rich list in 2014 with a net worth of US$5.9bn.

According to Street Talk, Salim is partnering with Winter in the potential acquisition of several Rio coal ventures. The Winter consortium is believed to be up against Glencore and Mick Davis’ X2 Resources in the bidding.

Glencore announced earlier this month it would tackle its roughly US$30bn in debt through a $14.5bn debt reduction program, which would include the potential sale of its Australian grain interests.

Market analysts said the move could also be in part to make a play for Rio’s coal assets.

According to the AFR, whoever purchased the assets – which are highlighted by the not-yet-underway Mount Pleasant project – would have to spend more money after the acquisition in order to get full value.

It’s believed Mount Pleasant would need between US$1bn and US$1.5bn in capital expenditure to get up and running.

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