Rio Tinto, a mining major, has entered into a binding agreement with China Molybdenum (CMOC) offload 80% stake in Northparkes copper-gold mine located in central-west New South Wales for $820m.
The development follows the employment of Macquarie Group to facilitate the sale of Northparkers earlier in April 2013. Rio holds 80% stake in the project, while remaining 20% ownership is with Japanese company Sumitomo Group.
Rio Tinto chief financial officer Chris Lynch stated that the sale of Northparkes represents company’s focus and discipline in assigning capital across its operations.
"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," added Lynch.
"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."
The sale of Northparkes stake is subject to approval from the company’s joint venture partners, Sumitomo Metal Mining and Sumitomo Corporation Mineral Resources, waiving or failing to exercise their pre-emption rights under the terms of the Northparkes Joint Venture Agreement, the company said.
Awaiting regulatory approvals and the approval of CMOC shareholders, the transaction is scheduled for 2013-end closure.
"Rio Tinto will continue to manage Northparkes to the highest safety and environmental standards during the transition to the new owner," concluded Lynch.