September 08, 2008

Rio Tinto not to proceed with purchase of Broughton Coal

Australian coal seam gas producer Eastern Corp Ltd said that the sale of one of its coal mining subsidiaries to Rio Tinto owned Rio Tinto Coal Australia will not proceed.

Eastern Corp in a statement said that Rio Tinto Coal Australia, which had signed a memorandum of understanding to buy Broughton Coal Mining Ltd. for AUD 10 million in January, has advised it will not proceed with the purchase.

The company said “It is commencing preliminary discussions with another potential buyer of Broughton and is also considering a short term fund raising through the issue of a convertible note.”