Rio Tinto sells Northparkes stake to Chinese firm

China Molybednum has agreed a deal to buy Rio Tinto's 80 percent stake in Northparkes copper and gold mine in Australia for $820 million.

The Northparkes stake is one of several assets Rio has put up for sale as it aims to slash $5 billion in costs, pare debt and focus on its biggest, most profitable mines.

Chief financial officer Chris Lynch said the sale "represents great value for our shareholders and demonstrates our 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. 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 agreed sale of Northparkes follows our recently completed divestment of the Eagle nickel project in the United States while the Palabora sale is now unconditional and expected to close on 31 July. As always, any decision to sell is driven by our focus on delivering the best value for our shareholders."

The sale is subject to regulatory and shareholder approval and to Rio's joint venture partners in the mine, Sumitomo Metal Mining and Sumitomo Corporation Mineral Resources, waiving their right to, or failing to match, the offer.

If approved by regulators and shareholders, the deal - which is the biggest Chinese mining deal since China Guangdong Nuclear Power Corp won control of the Husab uranium project in Namibia for about $2.3 billion last year - is expected to be complete by the end of 2013.

Image: © Rio Tinto

Copyright is owned by Asia Outlook and/or Outlook Publishing. All rights reserved.