Rio Tinto’s Canada ore assets may be divested – by Matt Chambers (The Australian/Herald Sun – February 25, 2013

RIO Tinto’s $US1.7 billion ($1.64bn) Canadian iron ore assets could fall under the gaze of new chief executive and former iron ore boss Sam Walsh as he implements a more aggressive stance on sales of non-core or underperforming assets.

Mr Walsh, when asked specifically about the potential sale of the Iron Ore Company of Canada and whether it was considered a core asset, did not rule out a sale.

“I am looking hard at divestments,” Mr Walsh told North American investors in a conference call after the release of full- year earnings earlier this month.

“There are a number of assets for us that are not core or they are underperforming and you have got to say that any asset that falls into that category is going to fall within the radar screen.

“I am not confirming or denying any particular asset but we are going to take a very rational, a very logical approach and, quite frankly, if there are people out there who value these assets more than we do then certainly we will move forward and negotiate that opportunity.”

When the results were released, Mr Walsh flagged a more aggressive stance on Rio’s asset sales than had been pursued by his predecessor Tom Albanese.

Already earmarked for sale by Mr Albanese were the company’s diamonds business and the Pacific Aluminium unit it has carved out of Alcan for a trade sale or float.

Newfoundland-based IOC is Canada’s biggest iron ore producer but last year contributed just $US230 million of Rio’s $US9.4bn of net iron ore earnings, down more than 50 per cent from a year earlier. The rest of the earnings came from Rio’s giant network of iron ore mines, railways and ports in Western Australia’s Pilbara region.

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