LONDON (Reuters) – Rio Tinto, the world’s second largest listed mining company, is exploring a public listing of its Iron Ore Company of Canada business, banking and industry sources said, as it focuses on boosting revenue from its flagship Australian assets.
Iron ore, which accounts for most of Rio’s profit and is used in making steel, has provided healthy margins for years but the outlook is uncertain as major buyer China is expected increasingly to rely on recycling rather than importing raw material.
Following a commodity price crash in 2015, Rio put a string of assets on the block, mostly in coal, to decrease its debt load. In iron ore, its push to refocus has meant concentrating on Australia’s Pilbara region, where it has lower costs and higher grades.
IOC, 59 percent owned by the Anglo-Australian miner, 26 percent by Japan’s Mitsubishi Corporation and 15 percent by Labrador Iron Ore Royalty Company, is one of Canada’s largest producers of iron ore. It had revenues of $1.9 billion in 2017.
Rio had tried to sell its stake in IOC in 2012 as it already deemed it a non-core asset but it withdrew the process, saying the sale was not essential.
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