Rio Tinto very close to selling Iron Ore of Canada: report

Giant miner Rio Tinto (LON, ASX, NYSE:RIO), the world’s second-biggest producer of iron ore, is getting closer to sell its $4 billion stake in Iron Ore Company of Canada (IOC) as state-owned metals giant China Minmetals Corp confirmed Tuesday it is considering to bid for it.

Minmetals Assistant President, Wang Jionghui, told the Wall Street Journal Tuesday the company has “invested in the neighbourhood before” and that it was “familiar with the area."

In March Rio put its 59% stake in IOC on the block, as part of its several attempts to cut $5 billion worth of expenses from its business globally this year and next.

The company appointed investment banks Credit Suisse and CIBC to lead the sale of most of its shares in IOC. The stake’s sale is estimated to fetch roughly $1.7 billion.

Minmetals is the first Chinese miner to ratify its interest in Rio's Canadian iron-ore operations. Commodities giant Glencore Xstrata (LON:GLEN) and private-equity firm Blackstone Group (NYSE:BX) are also said to be eyeing the stake in Canada's largest iron ore producer.

Meanwhile Rio Tinto is sacking more staff at its iron ore operations in Western Australia. The jobs that are going include executives at the general manager and manager level, reports ABC.

The recent slump on iron ore prices has added extra pressure to Rio Tinto, which relies on iron ore for four-fifths of its earnings, and has been investing heavily to expand mines in Canada and Australia to supply China and other markets.

Image courtesy of Iron Ore of Canada