Rio completes $850m sale of potash assets

JOHANNESBURG (miningweekly.com) – Diversified giant Rio Tinto has completed the sale of its undeveloped potash assets to Brazilian mining giant Vale for a cash consideration of $850-million. The transaction included the Potasia Rio Colorado potash project, in Argentina, and the Regina exploration assets, in Canada. Rio Tinto on Thursday stated that the proceeds from the divestment would be used for repaying its debt. The company aims to reduce debt by $10-billion this year. The potash divestment, which was announced on January 30, was part of a larger transaction that included the Corumbá iron-ore mine, in Brazil, and the associated river logistics operations in Paraguay. The Corumbá transaction would be complete when appropriate consents were received, and completion was expected in the second half of 2009. The total consideration for the Corumbá assets was $750-million. In December last year, the diversified miner announced a detailed package of measures in response to the rapidity and severity of the global economic downturn. One aspect of those measures included expanding the scope of the group’s existing asset divestment programme. During 2008, Rio Tinto realised almost $3-billion from asset sales, comprising the Greens Creek mine in Alaska, for $750-million, its interest in the Cortez operation in Nevada for, $1,695-billion and the Kintyre uranium project in Western Australia for $495-million. Last month, the group announced the divestment of its interest in the Ningxia aluminum smelter in China for $125-million.