Rio says Energy America sale to start end April

LONDON (Reuters) - Global miner Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) is set to kick off the sale of its Energy America unit around the end of April, the head of Rio's energy division said on Tuesday.

Rio expects to invite offers for the unit, which sells coal for power generation, in late April or early May with a view to a sale in the third or fourth quarter, Rio (RIO.AX: Quote, Profile, Research, Stock Buzz) Energy and Minerals Chief Executive Preston Chiaro told the Reuters Global Mining Summit in London.

"We've had very strong expressions of interest from a wide variety of potential buyers both in the U.S. and more globally," he said, adding that that included private equity players.

He declined to give a valuation for Energy America although Natixis Bleichroeder analyst Jeremy Sussman valued it at about $4 billion when the possible sale was first announced in November.

Chiaro said Rio was interested in bids for the whole or parts of the unit.

Energy America, owner of five mines in Montana and Wyoming, was formerly called Kennecott Energy Co and produced about 6 percent of the fuel used for U.S. power generation in 2006, making it the second-largest U.S. coal producer by tonnage.

"Some individual mines would make a lot of sense for players in the area but there are antitrust issues," Chiaro said.

"There is also something to be said for someone who wants to come in and establish a large critical mass footprint in the U.S. and certainly we have those types of buyers interested as well."

Energy America is one of several assets Rio may sell following its acquisition of Canada's Alcan. Rio is also seeking to shore up its defense as it fends off a hostile takeover bid from larger rival BHP Billiton (BHP.AX: Quote, Profile, Research, Stock Buzz) (BLT.L: Quote, Profile, Research, Stock Buzz).

(Reporting by Eleanor Wason; Editing by Rory Channing)