Rio Tinto Tuesday recommended China-backed Yancoal as the buyer of most of its Australian coal mines, rebuffing a surprise higher bid from commodities giant Glencore earlier this month. The world's second-largest miner said in January it was selling Coal & Allied to Yancoal Australia - majority-controlled by China's Yanzhou Coal - for US$2.45 billion.

But Glencore, which like Yancoal also operates numerous coal mines in Australia, offered US$100 million more for the assets - in New South Wales state - earlier this month. Rio said it spoke to both parties but still favoured Yancoal since the deal was expected to be completed faster due to greater funding and regulatory certainty.

Yanzhou Coal is one of China's largest mining groups by market capitalisation. "We believe Yancoal's offer to purchase our thermal coal assets for US$2.45 billion offers the best value and greater transaction certainty for shareholders," Rio's chief executive Jean-Sebastien Jacques said in a statement.

"Yancoal's revised offer is the most attractive because it removes the deferred payment structure, can meet the timeline we have set for the transaction, and has given us certainty regarding the outstanding regulatory approvals required."

Copyright Agence France-Presse, 2017