Feb 13 2008
Rio Tinto has reached agreement on the first sale under its planned programme to divest at least US$15 billion of assets. The Group has signed an agreement to sell Kennecott Greens Creek Mining Company and Kennecott Juneau Mining Company, the subsidiaries holding its interests in the Greens Creek Mine in Alaska, to an affiliate of Hecla Mining Company.
Greens Creek is a silver, gold, zinc and lead underground mine and concentrator facility on Admiralty Island near Juneau. It is currently a joint venture between a Rio Tinto Kennecott subsidiary (70.3 percent) and a Hecla subsidiary (29.7 percent).
The sale price is US$750 million. The price comprises a cash component of US$700 million and the balance in Hecla common stock. Closing is subject to customary conditions, including expiration of the waiting period under the Hart-Scott-Rodino Act.
“The sale of our interests in the Greens Creek Mine is a very positive first step towards our target of realising asset sales of US$10 billion in 2008,” said Guy Elliott, Chief Financial Officer of Rio Tinto.
Bret Clayton, Rio Tinto’s Copper Product Group Chief Executive said, “Hecla Mining has for a long time been our joint venture partner and already has a solid understanding of the mine, the employees, the community and the State. Hecla is well placed to assume operation of the mine.”