Rio Tinto Aims For $10 Billion From Asset Sales In 2008 

LONDON -(Dow Jones)- A "long queue" of potential buyers has formed for the assets to be sold by mining company Rio Tinto PLC (RIO.LN), a senior company executive said in the transcript of a call to investors published on its Web site Thursday.

Sales of $10 billion are expected in 2008, with the overall total forecast at around $15 billion when all divestitures are completed, Rio Tinto’s Chief Financial Officer Guy Elliott said.

The businesses include downstream assets such as its engineered products division, which makes parts for the aerospace sector, inherited through the acquisition of Canadian aluminum producer Alcan last year, as well as businesses already within Rio Tinto, he said.

Elliott said Rio Tinto doesn’t intend to rush the sales, had deliberately not boxed itself into a timeframe, and would be "demanding" of potential buyers.

"If we don’t get proper value for these businesses, we are going to keep them," Elliott said, according to the transcript. "But we’re confident that we will get good value, and the reason that we’re confident is that we’ve got a long queue which has formed for each of these businesses, and for some businesses that aren’t on our list, that is formed by strategic buyers and private equity buyers," he added.

Elliott said the impact of the subprime mortgage crisis on the global economy has affected the ability of some investors to raise the cash needed for acquisitions.

"Private equity buyers for some of these businesses are unable to raise all that much money, but fortunately for us, there’s a lot of strategic interest too from people who can afford to raise the money," he added.

His comments came as Rio Tinto continues to shore up its defenses against a proposed three-for-one share deal from rival mining giant BHP Billiton PLC (BLT.LN). Rio Tinto has rejected the bid, and BHP Billiton must make its proposed offer firm by Feb. 6 or walk away.

On the engineered products division Elliot said aerospace is a very politically sensitive sector, which makes the sale of this part of Alcan’s business more complex.

"I’m not suggesting that (the sale) is going to happen in a hurry," Elliott said. "I think of all the businesses that we’re looking at, (engineered products) might take a longer rather than shorter time to accomplish," he added.