RPT-IPO VIEW-Rio Tinto's U.S. coal unit could face tepid demand

(Repeats story filed Nov. 13, with no change to headline or text)

*Rio Tinto to get about $520 mln from Cloud Peak IPO

*Sales at coal producer Cloud Peak rise, but demand wobbly

*Cloud Peak valuation is high compared to peers

By Phil Wahba and Clare Baldwin

NEW YORK, Nov 13 (Reuters) - Anglo-Australian miner Rio Tinto Plc (RIO.L)(RIO.AX) is hoping to raise $520 million by spinning off its U.S. coal business, but analysts cautioned that demand for the offering could be tepid.

The IPO is priced at a premium compared with competitors.

And Cloud Peak plans to issue $600 million in notes at the same time as the IPO, which will bring its total debt load to $760 million.

On top of that, global demand for coal has plummeted and the outlook is cloudy.

Rio Tinto is weighed with debt stemming from its 2007 acquisition of Canadian aluminum maker Alcan, and plans to take most of the initial public offering's proceeds.

The Anglo-Australian company has tried to sell a stake in Cloud Peak before. The company filed for its IPO last year but postponed it, citing difficult market conditions.

Cloud Peak expects to sell 30.6 million shares for between $16 and $18, each, and list them on the New York Stock Exchange under the symbol "CLD"

But investors will be paying for that performance. In a research note, IPOdesktop said that at the $17 midpoint per-share price, Cloud Peak would trade at a premium over rivals such as Western Coal (WTN.TO) and Grande Cache Coal. (GCE.TO) That assessment is based on price-to-earnings ratios for the first nine months of 2009.

According to the prospectus Rio Tinto is using the proceeds from the sale to bolster its own balance sheet instead of investing in the Cloud Peak business. The Anglo-Australian miner will retain 48.3 percent of the company.

"Investors are definitely going to pause and say 'Is this just opportunistic timing for the parent or is this really a company worth owning?'" Nick Einhorn, an analyst with Connecticut-based investment firm Renaissance Capital said on Friday.

However, Morningstar senior equity analyst Michael Tian was more positive about the IPO saying that Cloud Peak has a strong position in the rich Wyoming and Montana coal mining area.