[MINING] Rio Tinto raises $500m from uranium arm

Rio Tinto has offloaded its Kintyre uranium project in Western Australia for close to $500m as it continues its programme to dispose of $10bn of assets this year. The exploration project, said to have potential deposits of up to 80m lb of uranium, has been bought by a consortium made up of Cameco of Canada and Mitsubishi of Japan.

As soaring oil prices and international attempts to reduce greenhouse gas emissions have put the spotlight back on nuclear energy, Japanese trading houses are also moving to take upstream equity stakes in natural uranium production. Mitsubishi last year took a 50pc stake in a uranium mining project in Canada from CanAlaska Uranium.

The deal brings to about $3bn the amount Rio has raised through disposals so far this year. As part of its defence against a hostile takeover offer by BHP Billion, Rio chief executive Tom Albanese has pledged to sell $10bn of assets this year and at least $15bn in total.
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"It illustrates our ability to obtain real value for our assets and follows the sales earlier this year of the Greens Creek mine in Alaska for $750m and our interest in the Cortez operation in Nevada for $1.7bn," chief financial officer Guy Elliott said. The company is also looking to sell US coal business Rio Tinto Energy America, its talc and borates arm, its share of an Australian copper mine and its uranium operations in the US.

After its acquisition of Alcan last year, the company is also working on a sale of Alcan's packaging business, but the process is believed to have been made more difficult by the problems in the credit markets.

Source: Telegraph|By David Litterick

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