Rio Tinto Studies Selling Alaska Copper-Mine StakeThomas Biesheuvel
Rio Tinto Group, the world’s second-largest mining company, is considering selling its stake in an Alaskan copper project as it cuts costs across its businesses.
Rio will review its 19 percent interest in Northern Dynasty Minerals Ltd., the Canadian metals explorer that owns the Pebble copper project, the London-based company said today in a statement. Options include a possible divestment, it said.
Major mining companies such as Rio and BHP Billiton Ltd., the largest, are reining in investments after a decade-long boom in metal prices petered out. Rio, which is cutting costs after writedowns erased profit in 2012, said this month that capital spending in 2015 will be less than half what it was last year.
“Rio Tinto will consider the Pebble project’s fit with the group’s strategy of investing in and operating long-life and expandable assets,” it said today. Rio is the biggest investor in Northern Dynasty, which is valued at C$169.1 million ($160 million) after falling 43 percent in Toronto trading this year.
Rio’s copper business is focused on four existing mines as well as the La Granja project under development in Peru and the Resolution venture in Arizona.
Northern Dynasty became sole owner of the Pebble complex after Anglo American Plc said in September it was withdrawing from the project, in which it owned a 50 percent stake. Northern Dynasty dropped 20 percent to C$1.43 at the close in Toronto.
The U.S. Environmental Protection Agency said in 2012 that salmon habitats may be harmed by mining near Bristol Bay, where Pebble is located. Fishermen, tribal groups and environmental campaigners formed a coalition to oppose the development in September, saying waterways and fisheries jobs were at risk.