Anglo-Australian Rio Tinto Ltd (ASX:RIO) expects the total gross proceeds for the divestment of the majority of Rio Tinto Energy America will be at least US$2.0 billion.

The resource giant is selling Cloud Peak Energy Inc, a recent spin-off of Rio Tinto Energy America.

The company announced today the pricing of the underwritten secondary offering of 25,600,000 shares of Cloud Peak Energy common stock for US$19.50 per share.

Following the completion of the offering, Rio Tinto will retain an approximately 6.2 per cent interest in Cloud Peak Energy Resources LLC, assuming no exercise of the underwriters' overallotment option.

Subject to closing, the transaction is expected to generate gross proceeds of US$499.2 million.

Rio Tinto said the transaction is expected to close on or about December 21, 2010.

The underwriters have an over-allotment option to purchase up to 3,800,000 additional shares of Cloud Peak Energy Inc.'s common stock, exercisable within the next 30 days, and if exercised, would be expected to generate an additional US$74.1 million of gross proceeds.

If the overallotment is fully exercised, this offering would result in the divestment of 100 per cent of Rio Tinto's holdings in Cloud Peak Energy.

"The pricing of the secondary offering demonstrates another successful outcome of our overall divestment strategy," said Guy Elliott, Chief Financial Officer, Rio Tinto.

"With the proceeds from the Cloud Peak Energy transactions and the sale of Jacobs Ranch, the total gross proceeds for the divestment of the majority of Rio Tinto Energy America will be at least US$2.0 billion," he said.