Rio Tinto adds Ivanhoe Australia to its blowout sale
Rio Tinto's (ASX, LON, NYSE:RIO) new CEO Sam Walsh, has added the company’s $87 million majority stake in Ivanhoe Australia to its list of assets up for sale, in an ongoing effort to curb costs and bolster the company’s balance sheet.
The giant miner's Turquoise Hill Resources unit is likely to hire Citigroup (NYSE:C) to run the sale, reports Wall Street Journal, as the bank was already in charge of selling Turquoise’s 58% stake in SouthGobi, a Mongolian coal mine developer. But that transaction was recently delayed until further notice.
The announcement did not come as a surprise for investors, as Rio Tinto has made it clear that its main interest in Turquoise Hill is tied to the massive Oyu Tolgoi copper and gold mine in Mongolia.
However rumours indicate that Rio’s sale of a majority stake in Ivanhoe Australia is likely to trigger a full takeover of the company, which most recent market value is $148.7 million.
Rio Tinto obtained the Ivanhoe Australia and SouthGobi stakes last year when took full management control of Turquoise Hill in April last year.
(Image by the State Library of Queensland, Australia)