18th Aug 2014 06:47
LONDON (Alliance News) - Rio Tinto Group PLC Monday confirmed an earlier press report that it is considering options for its stake in the operator of a mine in Papua New Guinea, which has a potential gold and copper resource worth over USD60 billion.
Rio said it would review all options on its 53.83% stake in Bougainville Copper Ltd, the operator of the Paguna mine on Bougainville Island.
The mining group said the stake review comes in the wake of new mining legislation passed earlier in August by the Bougainville government. Under the changes, the power to regulate mining activities on Bougainville passed from Papua New Guinea's central government to the island's autonomous legislator. When the island's government passed its new mining act, Rio was stripped of all exploration and mining licences, prompting the mining group to start taking legal advice on its stake.
Earlier Monday Bloomberg quoted Adrian Wood, an analyst at Macquarie Group Ltd, saying that, should a sale of the stake take place, Rio has shown it is "adamant that it isn't giving away assets cheaply at the moment," adding the company will not sell the business if it doesn't get value.
By Sam Unsted; [email protected]; @SamUAtAlliance
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