Rio Tinto recommended China-backed Yancoal as the buyer of most of its Australian coal mines, rebuffing a surprise higher bid from Glencore earlier this month. Rio Tinto said in January that it was selling Coal & Allied to Yancoal Australia, majority-controlled by China’s Yanzhou Coal, for USD2.45 billion. But Glencore, which like Yancoal also operates several coal mines in Australia, offered USD100 million more for the assets in New South Wales state. Rio said it spoke to both parties but still favored 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 capitalization. Under the original proposal, Yancoal was to pay an initial sum of USD1.95 billion and the rest as deferred payments, but it will now make a single payment of USD2.45 billion, Rio said. Yancoal had already been given the green light by Australia’s Foreign Investment Review Board (FIRB), while the Glencore plan was subject to regulatory approval. Rio Tinto is selling Coal & Allied as part of a divestment drive which analysts expect will lead to a complete exit from the sector.