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Rio Tinto's Canadian iron ore assets or spin-off

Release date:2018-12-28  source:界面新闻  author:上海有色*  Browse times:3154
In 2012 and 2013, Rio Tinto tried to sell Canadian iron ore company shares, but failed.

The global mining giant Rio Tinto (hereinafter referred to as Rio Tinto) wants to focus more on Australia's iron ore asset investment.

According to Reuters, Rio Tinto is preparing to launch its Iron Ore Company of Canada business in New York and Toronto in the first half of next year.

This means that Rio Tinto will spin off Canadian iron ore assets.

Reuters quoted people familiar with the matter as saying that although Rio Tinto is unlikely to sell the assets, it does not rule out the possibility of selling. In 2012 and 2013, Rio Tinto tried to sell Canadian iron ore company shares, but failed.

Iron ore is the largest contributor to Rio Tinto's revenue. According to the 2017 financial report, Rio Tinto's revenue was 40 billion US dollars, up 18.34% year-on-year; net profit was 8.762 billion US dollars, up 90% year-on-year. Among them, iron ore business income was 18.251 billion US dollars, accounting for 45.63% of total revenue; net profit was 6.692 billion US dollars, with a contribution rate of 76.38%.

In addition to the Pilbara region of Australia, Rio Tinto owns iron ore assets in Canada and Simandou, Guinea.

As Canada's leading iron ore producer, Rio Tinto Canada's iron ore company has one iron mine, a metallurgical plant, and a pellet mine, as well as a seven-island port facility in Quebec and a 418-kilometer long railway. The ore is transported from the mine to the port.

According to the announcement, Canadian iron ore company's 2017 revenue is $1.9 billion. The company has more than 2,500 employees, with an annual production capacity of over 22 million tons of iron ore and a production of 11.2 million tons in 2017.

Rio Tinto holds 58.7% of the Canadian iron ore company, Japan's Mitsubishi Corporation has a shareholding of 26.2%, and Canada's Labrador Iron Ore Royalty Income Corporation holds the remaining 15.1%.

In addition to Canadian iron ore assets, Rio Tinto also wanted to sell its iron ore assets in Simandou, Guinea two years ago. The Simandou iron ore project was estimated to have a total reserve of 2.757 billion tons in 2017.

In 2010, Rio Tinto and its largest single shareholder, Chinalco and the Guinean government, established a joint venture, Mineral Resources, to jointly develop and operate the Simandou iron ore project. Rio Tinto accounted for 45.05% of the joint venture, Chinalco accounted for 39.95%, and the Guinean government accounted for 15%.

On October 28, 2016, Rio Tinto and Chinalco signed a non-binding framework agreement to sell its stake in the Simandou iron ore project to Chinalco for US$1.1 billion to US$1.3 billion.

However, this equity sale agreement was declared invalid on October 28 this year.

Since 2015, Rio Tinto has begun to divest non-core assets and exert its strength on core assets. It will focus on the development of iron ore projects in copper mines, bauxite mines and the Pilbara region of Australia.

Rio Tinto first sold the coal assets thoroughly, sold some of the electrolytic aluminum plants, and sold the loss-making Indonesian copper mines and the Rosin uranium in Africa in the second half of this year.

In the first half of this year, the value of the coal and electrolytic aluminum plants sold by Rio Tinto was nearly $5 billion.

The interface journalist contacted the responsible person of Rio Tinto on the spin-off of the Canadian iron ore company. As of press time, no response has been received.

 
Key word: 铁矿石 资产
 
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