(RTTNews) - Friday, Cloud Peak Energy Inc. (CLD), a subsidiary of mining giant Rio Tinto Plc, announced the pricing of an initial public offering of 30.6 million shares of its common stock at a price of $15.00 per share, reportedly below the expected price range of $16 to $18 per share the company sought.

Underwriters have the option to purchase up to an additional 4.59 million shares to cover over-allotments, if any. Wyoming headquartered Cloud Peak will not retain the proceeds of the offering.

London-based Rio has announced $7 billion of asset sales since 2007 and use the proceeds to repay debt from its $38.1 billion purchase of Canadian aluminum producer Alcan Inc.

Cloud Peak sale proceeds are expected to be be used to finance the acquisition of assets in Rio's western U.S. coal business, according to a November 9 filing. The company plans to use the proceeds from the offering to buy 52% of the Rio Tinto's assets it operates and Rio Tinto will own the rest.

Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. Inc. and RBC Capital Markets Corp. are acting as joint book-running managers for the offering.

The shares will begin trading on November 20, on the New York Stock Exchange under the ticker symbol, "CLD."

Cloud Peak Energy is the third largest coal producer in the U.S. and specializes in the production of low sulfur, sub-bituminous coal. The company owns and operates three surface coal mines in the Powder River Basin. The Antelope Mine and Cordero Rojo Mine are located in Wyoming and the Spring Creek Mine is located near Decker, Montana.

U.S. economy witnessed growth last quarter after a yearlong contraction, expanding at a 3.5% pace, the Commerce Department said on October 29. The U.S. relies on coal for about half of its power generation, compared with about 20% for natural gas. Demand for coal is expected to improve next year as economy improves further.

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