Mining group Rio Tinto analyses total or partial sale of its operations in Mozambique

26 June 2013

Anglo-Australian mining group Rio Tinto is considering the total or partial sale of its operations at the Benga mine, in Mozambique and is looking for a financial consultant to support the process, the Wall Street Journal reported.

Citing unnamed sources the US newspaper said that the company had launched a “tender amongst several investment banks,” trying to find a solution for the “troubled coal unit” located in Tete province, central Mozambique.

“Rio Tinto is trying to boost its balance sheet by selling a number of non-core businesses and under performing assets,” the newspaper said. The news coincided with a halt to coal exports from Mozambique due to safety problems.

In 2012 Rio Tinto Coal Mozambique posted losses of over US$3 billion following a downward review of coal reserves at the Benga mine, in Tete province, along with difficulties in transporting the coal away from the mine. The company bought the Benga mine in 2011 from Riversdale Mining for US$3.7 billion.

Now, and according to the Wall Street Journal, the multinational company may net US$700 million if it decides to sell the entire unit, or it may look for a partner to buy part of the project to share expenses. (macauhub)