OREANDA-NEWS. December 12, 2012. Rio Tinto has reached a binding agreement to sell its 57.7 per cent effective interest in Palabora Mining Company Limited (Palabora) for USD 373 million.

The purchaser is a consortium comprising South African and Chinese entities led by the Industrial Development Corporation of South Africa Limited and Hebei Iron & Steel Group, who are committed to the ongoing sustainable management of Palabora.

The sale is subject to customary regulatory approvals in South Africa and China which are expected to take four to six months.

Guy Elliott, chief financial officer of Rio Tinto said "Palabora is a good business but is no longer a natural fit within Rio Tinto's portfolio. Selling our stake reflects Rio Tinto's policy of continually reviewing our portfolio to generate best value for shareholders.

"I expect Palabora to continue prospering under its new ownership. During the transition we will continue to run the operations efficiently and safely."

Note to editors:

The Consortium comprises the following parties (respective interests in brackets):

• Hebei Iron & Steel Group (35%), a leading international steel producer wholly-owned by the Chinese Government;
• The Industrial Development Corporation of South Africa Limited (20%), a development institution wholly-owned by the South African Government;
• Tewoo Group Co., Ltd (20%), a diversified group wholly-owned by the Chinese Government;
• General Nice Development Ltd (25%), a privately-owned Chinese trading company;

The purchase price is subject to customary adjustments upon closing.