Rio Tinto about to offload stake in Grasberg mine for $3.5 billion – by Cecilia Jamasmie (Mining.com – May 23, 2018)

http://www.mining.com/

World’s No.2 miner Rio Tinto (ASX, LON, NYSE: RIO) confirmed Wednesday is ready to sell its stake in the giant Grasberg mine, the world’s second largest copper operation, to Indonesia’s state mining holding company Inalum for $3.5 billion.

The move could mark the end to a long-drawn-out, three-way dispute over the mine, which has been centered on bringing local ownership of Grasberg up to 51%, a main requisite set by the Indonesian government to allow Freeport-McMoRan (NYSE:FCX) to keep operating in the country.

Discussions with PT Indonesia Asahan Aluminium, known as Inalum, and Freeport — the other two companies engaged in talks — were ongoing, Rio said, “including as to price,” noting that no agreement had been reached.

Rio’s deal with Freeport was struck in 1995 and entitles it to a 40% share of production when certain output levels are hit. But as a result of strikes and other disruptions and as the open pit at Grasberg nears the end of its life, the Melbourne-based miner hasn’t seen any benefit since 2014.

Chief executive Jean-Sebastien Jacques publicly questioned Grasberg’s place in Rio’s future back in February 2017. He followed in June with a remark about the mine being a world-class copper deposit, which might not be a world-class mining investment.

For the rest of this article: http://www.mining.com/rio-tinto-offload-stake-grasberg-mine-3-5-billion/?utm_source=dlvr.it&utm_medium=twitter

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