Rio Tinto and Anglo American have signed an agreement to divest their combined 74.5% stake in Palabora Mining Company to a consortium of companies for $446m.
Palabora Mining manages the Palabora copper mine, smelter and refinery complex located in the Limpopo Province of South Africa.
On completion of the transaction, China’s state-owned Iron & Steel Group will own 35% in the firm, while the Industrial Development Corporation of South Africa will gain a 20% stake.
China’s Tewoo Group and private trading company General Nice Development will purchase a 20% and 25% interest in the company respectively.
The consortium will now undertake the ongoing sustainable management of Palabora, and the sale, which is subject to the requisite Chinese and South African regulatory approvals, is expected within four to six months.
Rio Tinto chief financial officer Guy Elliott commented on the sale, "Selling our stake reflects Rio Tinto’s policy of continually reviewing our portfolio to generate best value for shareholders.
"I expect Palabora to continue prospering under its new ownership. During the transition we will continue to run the operations efficiently and safely," Elliott added.
Rio Tinto is selling its 57.7% stake for $373m, while Anglo American is selling its 16.8% interest for $103 million, valuing Palabora Mining at $612 million.
Image: Palabora Mining manages the Palabora copper mine, smelter and refinery complex located in South Africa. Photo: Palabora Mining Company.