Rio sells Australian unit Coal & Allied Industries Deal must...

• Rio sells Australian unit Coal & Allied Industries
• Deal must still be approved by Chinese, Australian regulators

(Adds quotes, divestment program)

SYDNEY, Jan 24 (Reuters) - Rio Tinto Plc (RIO) said it agreed to sell Australian unit Coal & Allied Industries Ltd to Chinese government-controlled Yancoal Australia Ltd (YAL) for up to $2.45 billion in cash.

"This sale delivers outstanding value for our shareholders and is consistent with our strategy of reshaping our portfolio to ensure the most effective use of capital," said Rio Tinto CEO Jean-Sébastien Jacques in a statement on Tuesday.

Rio has been looking to offload less profitable businesses to help fund its promise to raise dividends and focus on iron ore and copper mining amid a broad slump in commodities prices. It has sold $7.7 billion of assets since 2013, including Australian coal assets such as stakes in the Bengalla, Clermont and Mount Pleasant mines.

The sale to Sydney-listed Yancoal, which is ultimately controlled by Shandong Province's State-owned Assets Supervision and Administration Commission, is likely to meet political resistance in Australia where the government has been blocking large asset sales to Chinese interests.

The deal is subject to clearance from the Australian Federal government, the government of New South Wales state, and Chinese regulatory agencies, Rio added.

The Sydney and London dual-listed firm said it had held "extensive" talks with potential suitors, but found Yancoal provided "the only offer that represented compelling value for the assets".

Rio's London-listed shares were up 3.3 percent in early trading on Tuesday, while the broader market was flat.