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Rio to cut debt with China smelter sale
31.12.08
Mining giant Rio Tinto, scaling back production and debt as demand around the world falls, has sold its stake in an aluminium smelter in China to a partner.
Qingtongxia Aluminium will buy Rio Tinto's 50% stake in the venture, Rio spokesman Jim Singer said. The company did not reveal the price but indicated that the proceeds would be used to reduce debt.
Alcan paid about $150 million (£104 million) in 2004 for a 50% stake in the smelter. Qingtongxia already owned 30% of the venture with the remainder owned by Ningxia Electric Power Investment.
Rio is cutting capital spending, and almost 14,000 jobs worldwide as well as selling assets to pay $38.9 billion of debt.
Since then aluminium prices have collapsed along with demand for the metal in China, the world's largest user.
Rio Tinto said last month it may sell as much as $30 billion of assets. It wants to sell Alcan's packaging and engineering products units, its talc unit and other mining projects.
"Completion of the transaction is expected in the first quarter of 2009, pending clearance of certain Chinese government approvals," Singer told Bloomberg.
