SYDNEY, May 9 (Reuters) – Rio Tinto could be two weeks away from gaining Mongolian approval to ship copper from its Oyu Tolgoi mine, helping offset a slide in revenue from its U.S. copper business as it faces pressure to slash costs and sell non-core assets.
A landslide at the firm’s Bingham Canyon copper mine in Utah in April, which could result in over $700 million in lost sales revenue based on Reuters calculations, was unlikely to force a rethink on assets sales, Chief Executive Sam Walsh told shareholders at the annual meeting in Sydney on Thursday.
There has been speculation that moves by Rio Tinto to sell its Northparkes copper mine in Australia could be delayed until full production resumed at Bingham Canyon.
“We are not expecting that that (the landslide) will have a difference” on divestment decisions, said Walsh, adding the firm would also not be draw into a “fire sale” of businesses.
Rio Tinto hired Macquarie Bank to sell its majority stake in Northparkes, a source familiar with the matter told Reuters. . Rio Tinto and Macquarie declined comment. Japan’s Sumitomo Corp. own 20 percent of the mine.
Walsh said the board was reviewing a number of non-core businesses, in addition to those already earmarked for divestment such as Pacific Aluminium and diamonds units.
Rio Tinto’s share of Northparkes’ copper output in 2012 was 43,100 tonnes – less than half the forecast 100,000 tonnes Rio Tinto will lose at Bingham Canyon this year.
Walsh, named chief executive in January promising an era of belt tightening, said he expected approvals from the Mongolian government within two weeks to transport copper out of its huge Oyu Tolgoi mine, which is costing $6.2 billion to build.
“We are still looking for some approvals in relation to exactly how we transport and ship the material….that we expect to receive in the next couple of weeks,” Walsh said.
“I think we have moved well down the path in terms of resolving issues the government had tabled with us, enabling us really to move forward with the project,” he added.
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