Carlyle pursues Rio Tinto's Australia mining asset - report

It is not known how much Carlyle has offered for the stake but according to The Wall Street Journal, Rio Tinto could raise as much as $1 billion from the sale.

Northparkes is one of a number of assets the mining conglomerate is looking to shed in a bid to reduce its costs by $5 billion and focus on its best performing assets. The divestments are part of a wider effort by the company to protect its single-A credit rating in a weakened commodities market.

Rio Tinto bought Northparkes as part of the A$3.5 billion ($3.6 billion) acquisition of North Limited in 2000, outbidding Anglo American. The mine, which is 20%-owned by Japan's Sumitomo Mitsui Banking Corporation, produced 43,100 tonnes of copper last year, 8% of Rio Tinto's total copper output, which is dominated by its Bingham Canyon mine in Utah.

Northparkes' contribution will become even less significant as the company's majority-controlled Oyu Tolgoi copper mine in Mongolia increases production.

Private equity has traditionally shied away from the mining sector because of its exposure to the commodities cycle. Additionally many GPs lack the expertise to handle mining operations that are often technically challenging.

 

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• Topics
• Australasia
• Industrials
• Buyouts
• The Carlyle Group
• Australia
• Commodities
• buyout