Rio Tinto and Anglo American Selling Palabora Interests

Rio Tinto and Anglo American announced on December 11, 2012, agreements to sell their interests in the Palabora Mining Co. in South Africa to a consortium of South African and Chinese entities led by Hebei Iron & Steel and the Industrial Develop-ment Corp. of South Africa (IDC).

Palabora operates a large block cave copper mine and smelter complex employ-ing 2,200 people in Limpopo province, South Africa. The company produces about 80,000 mt/y of refined copper, supplying most of South Africa’s copper needs and exporting the balance. The refinery pro-duces continuous cast rod for the South African market and cathodes for export. Byproduct metals and minerals include zir-conium chemicals, magnetite, and nickel sulphate, as well as small quantities of gold, silver, and platinum.

Rio Tinto will sell its 57.7% effective interest in Palabora for $373 million. Anglo American will sell its 16.8% effec-tive interest for ZAR893 million (about $103 million).

Guy Elliott, CFO of Rio Tinto, said, “Palabora is a good business but is no longer a natural fit within Rio Tinto’s port-folio. Selling our stake reflects Rio Tinto’s policy of continually reviewing our portfolio to generate best value for shareholders.”

The purchasing consortium includes Hebei (35%), a leading international steel producer owned by the Chinese govern-ment; General Nice Development Ltd. (25%), a privately-owned Chinese trading company; Tewoo Group (20%), a major diversified group wholly-owned by the Chinese government; and IDC (20%), a development finance institution wholly-owned by the South African government.

As featured in Womp 2013 Vol 01 -