On January 30, Australian mining giant Rio Tinto announced that it has signed definitive agreements to sell its Corumbá iron ore mine in the western Brazilian state of Mato Grosso do Sul with the associated river logistics operations in Paraguay, as well as its undeveloped potash assets in Argentina, to Brazilian mining company Vale for a total cash consideration of $1.6 billion.
The Corumbá transaction will take place after relevant approvals have been received, and completion is expected in the second half of 2009.
The earnings of the Corumbá iron ore mine were $6 million for the six months ending 30 June 2008 and $12 million for the year ended 31 December 2007. The gross assets of the Corumbá operations as at 30 June 2008 were $263 million. Corumbá currently has an annual capacity of 2 million mt of iron ore.
"This transaction demonstrates the depth and quality of our asset portfolio and our ability to unlock value for shareholders despite tough credit markets and economic conditions. This is a very positive step towards meeting our commitment to reduce debt by $10 billion in 2009," said Rio Tinto CFO, Guy Elliott.