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Sydney - Multinational mining and resources group Rio Tinto has agreed to sell its half in a Chinese aluminium smelting joint venture to its partner Qingtongxia Aluminium, a Rio spokesperson said on Wednesday.
Rio, which is trying to sell up to $30bn in assets to pay off debt, acquired the stake in the joint venture, capable of supplying up to 150 000 tonnes of aluminium smelting capacity a year, when it bought Canada-based aluminium group Alcan in 2007.
Both Rio spokesperson Jim Singer and a senior Qingtongxia executive declined to say how much Rio agreed to sell the stake for, because the sale was yet to be finalised. Alcan paid about $150m in 2004 for the half-interest.
"Completion of the transaction is expected in the first quarter of 2009, pending clearance of certain Chinese government approvals," Singer said.
Following a dramatic drop in world commodities prices and a sharp fall in its share price, Rio said earlier in December it would cut 14 000 jobs and broaden an asset sell-off plan to raise more cash.
Most of Rio's debt was incurred from the Alcan purchase.
Rio had hoped to sell $10bn worth of assets in 2008 out of a planned $15bn, but had to scrap that target due to the global economic downturn and credit crisis.
The group has been trying to sell the downstream packaging and engineering units of its aluminium unit Alcan, its North American coal unit, its minerals unit, the Northparkes copper mine in Australia and the US Sweetwater uranium operation.
So far it has managed to sell only $3bn worth of assets.
- Reuters