Rio Tinto targets 2009 debt reduction goal, sells $1.6 billion in assets

Rio Tinto Group, seeking to lower its debt by $10 billion this year, agreed to sell assets in Argentina, Brazil and Paraguay to Vale de Rio Doce for $1.6 billion in cash, the company said in a statement Friday.

The assets largely comprise the Potasio Rio Colorado (PRC) potash project in Argentina, and its Corumb√° iron ore mine in Brazil and the associated river logistics operations in Paraguay.

The deal is expected to reduce Rio Tinto's debt by $10 billion in 2009, the group said.

This transaction demonstrates the depth and quality of our asset portfolio and our ability to unlock value for shareholders despite tough credit markets and economic conditions, Guy Elliott, chief financial officer, Rio Tinto said in the statement. This is a very positive step towards meeting our commitment to reduce debt by US$10 billion in 2009.

Rio Tinto, -- the world's third largest mining company in the world, according to Bloomberg -- plans to complete the transaction of its potash sale in February. The Corumba transaction is expected to finalize in the second half of 2009, when appropriate consents are received, the company said.