Rio Tinto, Anglo to offload entire stake in South Africa's copper miner Palabora
06 September 2011
Mining giants Rio Tinto and Anglo American are planning to sell their entire stakes in Palabora Mining Company, a South Africa-based copper miner that is currently worth around $975 million.
"Rio Tinto is no longer the natural owner of Palabora due to the limited opportunity to significantly expand copper mining," the London-based miner said in a statement.
"We will continue engaging with employees, the South African government and other stakeholders as the sale process develops and to ensure a smooth transition to a new owner."
"While studies are under way for a potential extension to the copper mine's life from 2016 to 2030, the operation is no longer of a sufficient scale to suit Anglo American's investment strategy," said diversified miner, Anglo American.
Rio Tinto, the world's second-largest mining company holds 57.7-per cent stake in Palabora, while Anglo American owns 16.8 per cent and the remaining 25.5 per cent with the public. Their combined stake is worth around $730 million based on the average closing price of Palabora stock in Johannesburg last week.
Palabora accounted for 8 per cent of Rio Tinto's mined copper production in the first half of 2011, Liberum Capital said.