Rio Tinto reaches agreement to sell interest in Greens Creek mine for $750 million

Rio Tinto has reached agreement on the first sale under its planned programme to divest at least $15 billion of assets. The Group has signed an agreement to sell Kennecott Greens Creek Mining Co and Kennecott Juneau Mining Co, the subsidiaries holding its interests in the Greens Creek mine in Alaska, to an affiliate of Hecla Mining. Greens Creek is a silver, gold, zinc and lead underground mine and concentrator facility on Admiralty Island near Juneau. It is currently a joint venture between a Rio Tinto Kennecott subsidiary (70.3%) and a Hecla subsidiary (29.7%). 

The sale price is $750 million. The price comprises a cash component of $700 million and the balance in Hecla common stock.  Closing is subject to customary conditions, including expiration of the waiting period under the Hart-Scott-Rodino Act. “The sale of our interests in Greens Creek is a very positive first step towards our target of realising asset sales of $10 billion in 2008,” said Guy Elliott, Chief Financial Officer of Rio Tinto.

Bret Clayton, Rio Tinto’s Copper Product Group Chief Executive said, “Hecla Mining has for a long time been our joint venture partner and already has a solid understanding of the mine, the employees, the community and the State. Hecla is well placed to assume operation of the mine.”

In November 2007, Rio Tinto announced the results of its overall strategic review of its asset portfolio following its acquisition of Alcan. Options are also being explored to divest Rio Tinto Energy America (coal), Rio Tinto Minerals’ talc business, Rio Tinto Alcan Packaging, Rio Tinto Alcan Engineered Products, Rio Tinto’s interest in the Cortez gold mine in Nevada, Rio Tinto’s Northparkes copper mine in Australia and Rio Tinto’s Sweetwater (USA) and Kintyre (Australia) uranium assets.