The global mining giant has agreed to sell a majority stake in Queensland's Clermont thermal coal mine to Glencore-Xstrata and Sumitomo.

Rio Tinto has struck a deal with fellow mining giant Glencore-Xstrata and Japanese conglomerate Sumitomo for the sale of its 50.1 per cent stake in Queensland’s Clermont mine for a consideration of around USD$1.05 billion.

Under the deal Glencore and Sumitomo will each obtain a 25.05 per cent stake in the massive open pit thermal coal mine, with Glencore placed in charge of the mine’s operation and the marketing of its production.

While the deal will see Glencore acquire an equity share of just over a quarter and assume responsibility for the mine’s management, Japanese interests will collectively become majority stakeholders in Clermont, as Sumitomo joins Mitsubishi, J-Power and Japanese Coal Development on the list of the mine’s Japan-based owners.

Clermont is the third largest coal mine in Australia according to Rio, harbouring reserves of around 177 million tonnes and exporting 12 million tonnes of lower quality coal per annum.

The large-scale open pit mine operates at a comparatively modest cost due to its low strip ratio, which means less waste must be removed in order to access ore. 90 per cent of the mine’s coal can also be sold without the need for washing.

Rio Tinto and its partners decided to proceed with the development of the mine in 2007 at a cost of USD$950 million, with Rio’s share worth around USD$475 million at the time.

The mine commenced production in 2010, while output just recently hit its full capacity of 12 million tonnes a year.

The pricing of the sale is well in advance of estimates floated earlier this month, in the wake of reports that three other prospective buyers had submitted bids of USD$850 million for Rio’s majority stake.

Glencore is the world’s largest trader of seaborne thermal coal and one of its biggest producers of thermal coal. The company has striven to cut its coal business costs following the acquisition of Xstrata and its antipodean coal mining assets, shelving plans for new developments such as Queensland’s $6 billion Wandoan project.

Glencore nonetheless remains upbeat about the prospects for global thermal coal demand, and according to analysts the Clermont sale is precisely the type of contrarian deal that Glencore prefers, buying up assets when they’ve fallen out of favour with investors.

On Rio’s part the sale is part of a concerted drive to divest itself of unneeded assets in order to reduce costs and diminish a debt burden of $22 billion. At the same time that news of the Clermont sale emerged Rio said it had flagged or completed nearly $3 billion in asset sales this year.

Rio is currently seeking to reduce its stake in Coal & Allied’s thermal coal assets in the Hunter Valley from 89 per cent to 50 per cent, as well as offload its stake in Canada’s biggest iron ore company, Iron Ore Company of Canada, for USD$3.5 billion, and sell off poorly performing coking coal assets in the east African nation of Mozambique.