KKR Said to Weigh Bid for Australia Copper Mine Stake

KKR & Co. (KKR), the private-equity firm run by Henry Kravis and George Roberts, is considering a bid for Rio Tinto Group’s (BHP) stake in an Australian copper and gold mine, two people with knowledge of the matter said.

Rio Tinto had asked Macquarie Group Ltd. to find a buyer for 80 percent of the Northparkes mine in New South Wales, the people said, asking not to be identified as the information is private. There is no certainty KKR will bid for the stake, the people said.

The mine is valued at about $800 million, Citigroup Inc. said in a February report. Japan’s Sumitomo Corp. (8053) owns the remaining 20 percent of Northparkes.

The world’s second-largest mining company is seeking to divest assets including its diamond unit, Australian aluminum operations and Canadian iron ore division as Chief Executive Office Sam Walsh cuts costs to counter waning global demand for commodities. The London-based company may reap $10.4 billion from the asset sales, Deutsche Bank AG estimates.

Rio Tinto, which considered selling Northparkes in 2009, held onto the mine after copper and gold prices rose, the company said in December of that year. Northparkes, at which Rio Tinto also operates a training center for undergrounding mining, produced 43,100 metric tons of mined copper in the year through last June, a 7 percent increase from the previous year.

New York-based KKR’s investments in natural resources include a $7.2 billion purchase of Oklahoma-based oil company Samson Investment Co. in 2011 and a majority stake in oilfield services company Acteon Group Ltd. last year. It was among companies in talks to buy BHP Billiton Ltd.’s Ekati diamond mine in Canada, people with knowledge of the matter said in March last year.

That mine was sold to Harry Winston Diamond Corp., now called Dominion Diamond Corp., for $500 million in November.

A spokesman for KKR in Australia declined to comment on its interest in the Northparkes mine, which was reported yesterday by the Wall Street Journal.

Bruce Tobin, a spokesman for Rio Tinto in Melbourne, wasn’t immediately available to comment and Navleen Prasad, a spokeswoman for Macquarie in Sydney, declined to comment on the potential sale.

To contact the reporter on this story: Brett Foley in Melbourne at bfoley8@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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