Glencore PLC has agreed to sell its coal-haulage business in Australia’s New South Wales state to U.S. railroad operator Genesee & Wyoming Inc. for 1.14 billion Australian dollars (US$874 million). GRail, also known as Glencore Rail, currently hauls about 40 million metric tons of Glencore’s coal output from mines in the Hunter Valley to the Port of Newcastle, the world’s biggest coal-export hub, each year.
“The sale of the GRail business forms another significant part of Glencore’s debt-reduction program,” the company said in a statement. The deal will need approval by Australia foreign-investment regulator.
After the deal is completed, Genesee & Wyoming would manage much of Glencore’s coal-transport in the country’s Hunter Valley region under a 20-year contract.
GRail has been established in 2010 and has become the third largest coal haulage business in Australia.
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