Mining major Rio Tinto is seeking buyers for its A$83m ($87.63m) majority stake in Ivanhoe Australia, a move which extends its list of non-core assets that are up for divestment.
In a statement on the Australian Securities Exchange, Ivanhoe Australia has confirmed that Turquoise has commenced a "strategic review" of its ownership in the company.
Ivanhoe Australia’s most recent market value stood at A$148.7m ($156m), down from nearly A$1.5bn ($1.58bn) in early 2011 due to falling commodity prices.
Ivanhoe Australia produces copper and gold, and has various projects in the pipeline, including Mount Elliott and the Merlin project, which comprise gold and base metals.
The planned sale of the company is expected to result in a full takeover as Australia’s corporate law states that in most cases a buyer that acquires 20% of a company must bid for its complete takeover, reports the Wall Street Journal.
Turquoise Hill’s most valuable asset is the Oyu Tolgoi copper and gold mine in Mongolia, which has some of the world’s largest unexploited copper and gold deposits.
Earlier this year, Rio Tinto’s CEO Sam Walsh made a commitment to raise value for shareholders and announced that the cash would be raised from divestures this year.
The proposed sale of Ivanhoe Australia stake adds to Rio’s increasing list of assets that are up for sale, including Clermont and Blair Athol thermal coal mines; Pacific Aluminium unit; Coal & Allied; and the Northparkes copper mine, in Australia, The Wall Street Journal recently reported.
Rio Tinto had also appointed Citigroup to handle Turquoise Hill’s intended sale of its 58% stake in SouthGobi Resources, a coal miner in Mongolia, but the plan has been delayed until further notice, the publication reported.
Rio Tinto gained control of Ivanhoe Australia and SouthGobi stakes in 2012 when it took majority control of Turquoise Hill, which was previously operating under the name Ivanhoe Mines.
Image: Rio Tinto’s CEO Sam Walsh made a commitment in early 2013 to raise value for shareholders and announced that the cash would be raised from divestures in 2013. Photo: Rio Tinto.