Mining group Rio Tinto is in talks with Chinese state owned aluminum producer Chinalco about selling minority stakes in some of its operations, Rio Tinto said Monday.
The deal could increase Chinalco's share in the Anglo-Australian mining firm which is currently at 12 percent. The sale could be worth up to 6.1 billion pounds ($8.9 billion), according to the Sunday Times.
Rio Tinto confirms that it has held discussions with Chinalco regarding Chinalco acquiring minority interests in various operating businesses of the Rio Tinto group and also investing in convertible instruments, Rio Tinto said in a statement Monday to the Australian Securities Exchange according to the Associated Press.
Yet, Rio Tinto stated the transaction would be conditional upon approval by the shareholders of Rio Tinto and all necessary government regulatory authorities, the statement said.
Rio has committed to pay off part of its $37 billion debt by the end of 2009, reducing it to $10 billion, the Financial Times reports. The company is selling assets, reducing costs and delaying growth projects.
Last week, Rio Tinto said it sold assets in Argentina, Brazil and Paraguay to Brazilian firm Vale de Rio Doce for $1.6 billion in cash. It also sold a 50 per cent stake in its Ningxia aluminum plant in China. The sales total $1.73 billion.