News: UPDATE 1-Yancoal not concerned for now over Noble Group's financial strength

(Adds CEO quotes, Noble stake)

SYDNEY, May 26 (Reuters) - Yancoal Australia (YAL) said it was not concerned "at this stage" over the financial strength of its No.2 shareholder Noble Group , and that its acquisition of Rio Tinto's coal mines did not hinge on funding from the commodities trader.

Yancoal is expected to raise nearly $2 billion to fund the purchase, valued at $2.45 billion, of Rio's (RIO) Coal and Allied Division. Under that scenario, Noble would have to contribute about $260 million to avoid dilution of its 13 percent stake.

"From Yancoal's standpoint, I see no concern at this stage," Yancoal Australia Chief Executive Reinhold Schmidt told Reuters.

"We have an independent board committee who are working on what the capital raising structure is going to look like," Reinhold said on Friday. "It will be defined as we get closer and the market will show what that structure will look like."

This month, Singapore-listed Noble posted a shock quarterly loss and warned it would not be profitable for the next two years, sparking a slump in its stocks and bonds. Subsequently, rating agencies downgraded their outlook.

Yancoal is 78 percent owned by Yanzhou Coal Mining. Yanzhou is in turn owned 56 percent by the government of Shandong Province.