(Corrects spelling of mine in second reference.)
LONDON/MELBOURNE, March 28 (Reuters) - Global miner Rio Tinto RIO.AX RIO.L sold its remaining coal mine in Australia for $2.25 billion, making good on a pledge to exit the fuel and boosting its ability to fund future buybacks or higher dividends.
The sale of Rio's stake in the Kestrel mine to private equity manager EMR Capital and Indonesia's Adaro Energy Tbk ADRO.JK was made at a significant premium to analysts' expectations and was Rio's third coal deal this month.
In total, the assets have raised $4.15 billion. Rio has said the funds would be used for "general corporate purposes", which could include increased returns for shareholders.
Chief Executive Jean-Sebastien Jacques said in a statement the latest sale, combined with Glencore's GLEN.L purchase of the Hail Creek mine and the divestment of undeveloped coal projects would make Rio's portfolio stronger and more focused. said in a report the sale would make Rio Tinto the only mining major without coal assets, which should boost its allure to some investors.
The divestments would boost the miner's balance sheet by $3.9 billion, RBC added, "providing the potential for more buybacks or cash returns."
Tuesday's deal to sell Rio's 80 percent stake in the underground coal mine in Queensland state is subject to regulatory approvals and is expected to be completed in the second half of 2018. Kestrel mine in the Bowen Basin region, which produces high quality coking coal, will be jointly managed and operated by Australia-based EMR and Adaro and marks EMR's biggest mining investment. It last year bought an 80 percent stake in Zambian copper mine Lubambe for $97.10 million. will also be Adaro's biggest overseas investment.
"Coking coal ... offers excellent demand and supply fundamentals for decades into the future," EMR Chief Executive Jason Chang said in a statement on Wednesday.
Analysts said the funds raised by Rio Tinto implied a higher than expected long-term price for the steel-making ingredient of around $175 a tonne.
Premium coking coal futures in Singapore SCAFc1 peaked at $265 a tonne in January when China's pollution controls were in force but have since tailed back by nearly a fifth to $218 after curbs expired mid month.
"We continue to see coking coal as a beneficiary of the Chinese supply-side reforms, both from a lower Chinese domestic production perspective but also from the implications from environmental reforms," added RBC.
Rio Tinto shares rallied in London trading but were down 0.4 percent in Australia on Wednesday, in a broader market .AXJO down around 0.6 percent.
($1 = 1.2990 Australian dollars)