Anglo-Australian miner Rio Tinto plans to sell its 27-percent stake in a China-based aluminum processor for US$3 million, its Chinese partner in the venture said.

Tom Albanese, Chief Executive Officer of Rio Tinto [CFP]

Rio's aluminum subsidiary, Rio Tinto Alcan, wants to sell the stake in Nonfemet International (China-Canada-Japan) Aluminum Co amid a global divestment strategy, Shenzhen-listed Zhongjin Lingnan Nonfemet Co said yesterday.

Rio acquired the holding in 2007 when it bought Canada-based aluminum maker Alcan Inc.

Zhongjin Lingnan, a major Chinese zinc smelter, agreed to buy a 17-percent stake from Rio for US$1.89 million. After the transaction, Zhongjin's stake would increase to 72 percent from 55 percent in the venture, it said.

The companies haven't revealed the buyer of the other 10 percent.

Nonfemet International, established in 1986 as a venture between China National Nonferrous Metals Industry Corp, Alcan and Nippon Light Metal Co, had net assets worth 170.8 million yuan (US$25 million) at the end of last year.

In January, Rio Tinto Alcan sold a half stake in a Chinese aluminum smelter venture to Ningxia Hui Autonomous Region-based partner Qingtongxia Aluminum Group for US$125 million. Rio is eager to pay off a huge debt largely incurred from the Alcan purchase, and therefore it has agreed to a US$19.5 billion tie-up plan by Beijing-based Chinalco.

Last week, Rio's outgoing Chairman Paul Skinner expressed some regrets over the purchase of Alcan at the peak of a commodities boom and not moving fast to dispose of the non-core parts of the Alcan portfolio such as downstream packaging and engineering units.

Meanwhile, Zhongjin Lingnan said its net profit plunged 65 percent to 400 million yuan (US$58.6 million) last year as demand and zinc and lead prices fall.

(Shanghai Daily April 22, 2009)