Officials at Rio Tinto have agreed to sell their 80% stake in the Northparkes copper mine—Australia’s fourth-largest—to China Molybdenum Co. Ltd. for $820 million. While a “successful business,” said Rio Tinto CFO Chris Lynch, Northparkes “is not sufficient to be a good fit with our strategy.” Rio Tinto, he added, will continue managing Northparkes for safety and environmental standards during its transition.
China Molybdenum officials said they will finance the agreement through their own capital by raising debt and other methods. The company’s representatives also said they intend to keep Northparkes’ existing management team and employees while they operate the mine as a stand-alone business, Reuters reported.
The Northparkes sale, according to Lynch, follows the recent divestment of Rio Tinto’s U.S. Eagle nickel project, while its Palabora sale, in South Africa, is now forecast for the beginning of Q3 2013. In 2012, Rio reported that Northparkes produced 53,800 metric tons of copper concentrate and 72,200 gold oz.
The sale, said Rio Tinto officials, is subject to the company’s joint venture partners—Sumitomo Metal Mining and Sumitomo Corp. Mineral Resources—waiving or failing to exercise pre-emption rights under the Northparkes Joint Venture Agreement.