Rio Tinto Ends Plans for Canada Iron-Ore Unit Sale, IPO -Source
30 September 2019 - 12:51PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--Rio Tinto PLC (RIO.LN) has scrubbed plans for a sale or
initial public offering of its Canadian iron-ore unit, following a
yearslong effort to unload the business, according to a person
familiar with the matter.
Rio Tinto has been shopping around its 59% stake in Iron Ore Co.
of Canada on-and-off since 2013, but hasn't been able to find an
agreeable price with potential suitors as iron-ore prices have
waxed and waned.
Global miners including Rio Tinto have spent several years
selling or spinning off assets in a bid to reduce debt and lift
shareholder returns by focusing on only their most profitable or
promising operations. Iron-ore prices this year surged to their
highest value since early 2014 on concerns over a shortfall, but
have since eased and are widely forecast to edge lower over the
coming year.
Executives at Rio Tinto, which in Australia runs one of the
world's biggest iron-ore operations globally, had previously said
they were under no pressure to offload the Canadian business. "I
want to clean up the portfolio as quickly as I can but, at the same
time, there will not be a fire sale," Chief Executive
Jean-Sebastien Jacques had said in 2017 of his strategy to sell
assets.
The decision to tell bankers to stop working on the process for
a sale or IPO for the Canadian unit was earlier reported by
Bloomberg.
Iron Ore Co. of Canada produces iron-ore concentrate and pellets
from mining operations and processing facilities in Newfoundland
and Labrador. It also runs port facilities in Quebec.
The business is a joint venture between Rio Tinto, Mitsubishi
Corp., which owns 26%, and the Labrador Iron Ore Royalty Income
Corp., which owns 15%.
It recorded net earnings of $166 million for Rio Tinto in 2018,
down from $235 million the year earlier. Its operations had been
suspended for two months during the year amid labor
negotiations.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
September 29, 2019 22:36 ET (02:36 GMT)
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