Swiss mining giant Glencore Xstrata is in talks with Rio Tinto about a joint venture deal to streamline the two company’s struggling NSW Hunter Valley coal assets.

Glencore Xstrata chief executive Ivan Glasenberg said a joint agreement on coal would lead to better co-operation between the two companies.

“In the Hunter Valley assets there’s a lot to be done where we can get substantial synergies, so we’re talking to Rio Tinto, but it takes time for both sides to assess each other’s assets,” Mr Glasenberg told analysts after the company released its financial results in London.

“It’s something we’d look at.

“We’ve been talking to them for a long time.

“How we’ll get and how soon we can reach an agreement, I don’t know, but it’s something that clearly makes a lot of economic sense.”

Glencore Xstrata and Rio are eager to cut costs and improve margins amid weak thermal coal prices.

Rio’s Hunter Valley operations supply international markets with up to 12 million tonnes of thermal and semi-soft coking coal per annum.

Glencore Xstrata’s Hunter Valley coal mines supply local power stations and produce exports for Japan and China.

The Swiss mining giant is also reportedly interested in BHP Billiton’s struggling nickel assets after BHP recently suffered writedowns on its Nickel West mines in Western Australia.

Meanwhile, Mr Glasenberg said Glencore Xstrata had walked away from buying Shell’s downstream assets in Australia.

Royal Dutch Shell sold the assets to Dutch-owned oil trader Vitol and the Abu Dhabi Investment Council a fortnight ago for around $2.4 billion, edging out a party made up of Macquarie Capital and Glencore Xstrata.

“It’s no secret, we were looking at the Shell disposal in Australia but …. we couldn’t compete,” Mr Glasenberg said.