Anglo-Australian miner Rio Tinto has hired investment banks Credit Suisse and Canadian Imperial Bank of Commerce to sell its majority 59.7-per cent stake in Iron Ore Company of Canada (IOC), the country's largest iron ore producer, Reuters yesterday reported, citing two sources familiar with the matter.
A potential sale could value IOC at $3 billion to $4 billion, putting the value of Rio's stake at over $1.8 billion, said the report.
Other stakeholders in IOC are Japan's Mitsubishi Corp with 26.2 per cent and Labrador Iron Ore Royalty Income Corp with 15.1 per cent.
The London-based miner's newly appointed CEO, Sam Walsh had earlier said that he would sell non-core and under-performing assets in order to bolster the balance sheet of the company.
Rio Tinto, which last month wrote down $14-billion in the company's 2012 results on its Mozambique and aluminum assets, has already put its diamond and Pacific aluminum assets on the block (See: Rio Tinto CEO quits after $14-bn write-down).
But Rio Tinto, which generates four-fifths of its earning from iron ore, may be selling IOC, which has a lower grade of ore, and focus on the higehr grade ore at Pilbara in Australia and its under development massive Simandou iron ore mine in Guinea.