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Glencore to sell haulage assets

Glencore has announced it intends to sell its Hunter Valley coal rail assets. 

The sale is reportedly part of the miner's plan to pay down its approximately US$8 billion worth of existing debt levels.

According to the miner, the potential sale of the assets (Grail) "is in response to a strong global demand for high quality infrastructure assets and forms part of Glencore's wider global debt reduction program".

While a valuation has not been given the potential sale, it is understood the business generated approximately $100 million EBITDA last year, and over the last few years has had revenues around $160 million annually.

Glencore initially set up GRail in 2010 due to what it believed were high levels of access and cost from existing coal haulage operators in the Hunter Valley.

Since that time it has reportedly grown to become the third largest coal haulage business in Australia, hauling around 51 million tonnes last year. 

According to a source close to the matter, Glencore's coal will likely be hauled by the new owner of the rail assets, although it is understood the details of the coal movement will be discussed in the new agreements.

While the locomotives, wagons, and support equipment are understood to be part of the potential deal, Glencore's refeulling stations -located on its mines -will not be part of the sale.

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