China, private equity close in on Rio Tinto units

A Chinese company, a Western firm and several buyout houses are expected to submit final bids for Rio Tinto's borates and talc units, sources close to the matter said, in a deal that could top $1 billion.

A successful sale would be a boost for Rio (RIO.AX: Quote, Profile, Research) (RIO.L: Quote, Profile, Research) the world's No.2 miner, which is selling the minerals businesses to help reduce its near $40 billion of debt.

Final offers for the units will land later this quarter, one source close to the matter said on Friday, after due diligence and meetings with U.S.-based management which are likely to take place in the next few weeks.

London and Sydney-listed Rio was not immediately available in London for comment.

It is axing 14,000 jobs, cutting capital expenditures by more than half, and seeking buyers for a host of core and non-core assets after bigger rival BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research) ended its $66 billion unsolicited takeover bid in November.

The small group of bidders qualified for a second round are likely to have offered up to $1.1 billion in first-round bidding, which ended late last year, a second source said.

Failed bidders, worried about how much the borates business depends on U.S. construction, may have offered as little as $750 million, the source said.

The sources did not disclose bidders' names, and did not want to be named because the auction is at a sensitive stage.

Rio shares were down 0.1 percent at 1,728 pence by 1350 GMT, having closed 0.2 percent lower at A$43.93 in Sydney earlier.

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