Rio Tinto says it will back China-based Yancore's offer of AU$3.55 Billion (US$2.69 billion) for its New South Wales coal mines, currently held by Rio's subsidiary Coal & Allied.

"The revised offer from Yancoal of US$2.69 billion offers compelling value to our shareholders," read the statement from Rio Tinto chief executive Jean-Sebastien Jacques.

Yancoal upped its bid to surpass its Swiss-based rival Glencore, which was leading the bidding war last week.  But the Chinese company raised its total cash offer to $3.2 Billion by adding another $316 Million to its original bid, plus it increased its termination fee, in the event a deal is not completed, to $296.7 million.  Timing is also a consideration:  Mr. Jacques said Yancoal could complete its deal in the 2017 third quarter, while Glencore could not finalize it earlier than the first half of 2018. real6.ch

Foreign investors are particularly attracted to Hunter Valley coal because of its high quality; simply put, it pollutes less than lower grade stuff dug up elsewhere.