Rio to sell stake in Chinese aluminium smelter

Reuters reported that Rio Tinto has agreed to sell its half in a Chinese aluminium smelting joint venture to its partner Qingtongxia Aluminium.

Rio which is trying to sell up to USD 30 billion in assets to pay off debt, acquired the stake in the joint venture, capable of supplying up to 150 000 tonnes of aluminium smelting capacity a year when it bought Canada based aluminium group Alcan last year.

Mr Jim Singer spokesman of Rio and a senior Qingtongxia executive said that Rio agreed to sell the stake for because the sale was yet to be finalized. Alcan paid about USD 150 million in 2004 for the half interest. Mr Singer said that "Completion of the transaction is expected in the first quarter of 2009, pending clearance of certain Chinese government approvals."

Rio earlier this month said that it would cut 14 000 jobs and broaden an asset sell off plan to raise more cash. Rio had hoped to sell USD 10 billion worth of assets this year out of a planned USD 15 billion, but had to scrap that target due to the global economic downturn and credit crisis.

It has been trying to sell the downstream packaging and engineering units of its aluminium unit Alcan, its North American coal unit, its Minerals unit, the Northparkes copper mine in Australia and the US Sweetwater uranium operation. So far it has managed to sell only USD 3 billion worth of assets.

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