Rio Tinto Identifies $30 Billion In Potential Divestments

LONDON -(Dow Jones)- Rio Tinto PLC (RTP) said Monday it had identified as much as $30 billion in assets that it could sell to pay down debt and refocus the company.

Rio Tinto CEO Tom Albanese said divestments would total at least $15 billion, up from a $10 billion target, following a strategic review of the company’s businesses. The review followed this year’s $38 billion takeover of Canada’s Alcan Inc., financed by $40 billion of debt.

The new figure announced Monday comes as Rio Tinto tries to fend off a proposed 3-for-1 share offer from rival BHP Billiton PLC (BHP).

Rio Tinto has rejected the offer and Monday highlighted its rationale for continuing as a stand-alone company.

Albanese and CFO Guy Elliott said Rio Tinto assets up for divestment were not core to the company’s strategy.

"Although our business are all profitable there are a number that don’t fit so well," Elliott said.

The company plans to explore options for the sale of Rio Tinto Alcan Engineered Products, its stake in U.S.-based Cortez gold mines, a stake in U.S. zinc, lead and silver Greens Creek mine, Rio Tinto Minerals Talc, its stake in Australian copper-gold Northparkes project, the U.S. Sweetwater uranium project, and the Australian Kintyre uranium project.

The company had already announced it planned to sell Rio Tinto Alcan Packaging and Rio Tinto Energy America.

Albanese said the packaging business had already attracted "serious" interest from buyers.

Elliott said Rio Tinto had high price expectations for the sales but did not break down the price for each asset.

Rio Tinto would not issue equity to pay down the $40 billion Alcan-related debt and would aim for a single A credit rating, Elliott added.