Rio Tinto scraps sale of borates unit

22nd May 2009 16:13

Mining giant Rio Tinto has taken its borates business off the market after failing to attract an acceptable offer.The world's third-largest miner said it is still trying to sell other businesses targeted for sale, including talc."Rio Tinto believes the borates business is a good fit within its overall portfolio, based on its asset base, share of global supply and presence in Asian markets," it said Friday.Rio, which has also scrapped plans to sell its Jadar lithium-borate deposit in Serbia, has sold about $2.5bn of assets so far.It's still on track to raise $19.5bn (£13bn) from Chinese state-owned miner Chinalco. Chinalco agreed in February to pay $12.3bn for stakes in a number of Rio's mining assets. It will also subscribe for a $7.2bn convertible bond that could double its equity stake from 9% to 18%. A month later, the Chinese secured a $19.5bn loan to proceed with the deal and a further $1.5bn standby facility to fund working capital and other costs. "The company remains committed to delivering this strategic partnership," said Rio in response to a query from the Australian Stock Exchange concerning movements in its share price. Rio shares have slumped almost a fifth in the past week on fears the miner would scrap the deal and plump for a huge rights issue instead. Its biggest shareholders are thought to prefer a tie-up with rival BHP Billiton.