Rio Tinto sells controlling stake in Northparkes mine

29th Jul 2013 07:44

Rio Tinto has disposed its 80 per cent interest in the Northparkes copper-gold mine in the Australian state of New South Wales to China Molybdenum.The miner sold the controlling stake for $820m in an effort to cut debt and protect its single-A credit rating.Rio Tinto's Chief Financial Officer, Chris Lynch, said the transaction represents great value for shareholders and demonstrates the company's "continued focus and discipline in the way we allocate capital across the group". "Northparkes is a successful business but is not of sufficient size to be a good fit with our strategy," he said. "We believe it will have a strong future under its new ownership. Rio Tinto will continue to manage Northparkes to the highest safety and environmental standards during the transition to the new owner."The transaction is expected to close by the end of 2013. It is subject to approval by shareholders, regulators and joint venture partners Sumitomo Metal Mining and Sumitomo Corporation Mineral Resources. The sale of Northparkes follows Rio's divestment of the Eagle nickel project in the US. The disposal of South African copper producer Palabora Mining is now unconditional and is expected to close on July 31st, Lynch added. RD