Carlyle Group tables bid for Rio Tinto's Northparkes copper mine

10 May 2013

US private equity firm Carlyle Group has tabled a bid for Rio Tinto's 80-per cent stake in the Australian Northparkes copper mine, Dow Jones reported on Friday, citing a person familiar with the bid.

Carlyle is the second private equity firm to be show an interest in the Northparkes mine after KKR & Co, which has now backed out, according to several media reports.

The Anglo-Australian miner, which had last year end valued Northparkes at $405 million, had hired Macquarie Group to find a buyer for the mine that produced 53,800 metric tons of copper and 72,000 troy ounces of gold in 2012.

Although some analysts have said that the sale may fetch the London-based miner around $1 billion based on fellow rival BHP Billiton's last month sale of its Pinto Valley copper mine and a railroad in Arizona for $650 million. (See: BHP Billiton to sell Pinto Valley copper mine to Capstone Mining for $650 mn)

Northparkes came into Rio Tinto's portfolio as part of its $3.5-billion acquisition of Australian miner North Ltd in 2000, and has since expanded the open pit and underground mines, extending the life of the mines to 2024.

Japan's Sumitomo Group owns the remaining 20 per cent of Northparkes.

The proposed sale is part of Rio Tinto's new chief executive, Sam Walsh's plan to sell non-core assets and focus on more profitable ones like its iron-ore mines in Australia's Pilbara region.

Northparkes will become an insignificant asset once Rio Tinto starts mining its majority-controlled massive Oyu Tolgoi copper mine in Mongolia.

Rio Tinto is also looking to sell its Canadian iron-ore mines, stakes in several Australian coal mines, its Pacific Aluminium unit and its diamond business.