Carlyle bids for Rio Tinto stake in Australian copper mine: report

MELBOURNE Fri May 10, 2013 1:16am EDT

A woman runs past the reception desk of the Rio Tinto Limited Shanghai Representative Office in Shanghai March 22, 2010. REUTERS/Stringer

A woman runs past the reception desk of the Rio Tinto Limited Shanghai Representative Office in Shanghai March 22, 2010.

Credit: Reuters/Stringer

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MELBOURNE (Reuters) - U.S. private equity firm Carlyle Group (CG.O) has submitted a bid for Anglo-Australian miner Rio Tinto's (RIO.AX) 80 percent stake in the Northparkes copper mine in Australia, news agency Dow Jones said on Friday, citing a person familiar with the bid.

Northparkes is one of several assets Rio Tinto is looking to sell as it seeks to pare $5 billion in costs and focus on its best assets to help protect its single-A credit rating in a weakened commodities market.

Macquarie, which is advising Rio Tinto on the sale, declined to comment, as did a Carlyle spokesman in Beijing. Rio Tinto spokesmen were not immediately available for comment.

Analysts have speculated Rio Tinto could fetch as much as $1 billion for the mine. BHP Billiton recently agreed a higher than expected price of $650 million for the sale of its Pinto Valley copper mine and a railroad in Arizona to Canada's Capstone Mining Corp (CS.TO).

Carlyle, which has no mine investments in Asia, is the second private equity firm to be linked to the Northparkes stake, following reports that KKR & Co (KKR.N) was looking to bid. But KKR is no longer in the running, two sources told Reuters.

Private equity giants have so far typically shunned the sector, because of its exposure to the risky commodities cycle.

Bankers and analysts see base metals miner OZ Minerals (OZL.AX) and Chinese-controlled MMG Ltd (1208.HK), which is looking for assets between $1 billion and $7 billion to expand into one of the world's top diversified miners, as likely bidders for Northparkes.

MMG declined to comment and OZ Minerals CEO Terry Burgess was not immediately available to comment.

Northparkes, which is 20 percent owned by Japan's Sumitomo, produced 43,100 metric tons (47,510 tons) of mined copper in 2012, or about 8 percent of Rio's total copper output, which is dominated by its Bingham Canyon mine in Utah.

Northparkes' contribution will become even less significant as the company's majority-controlled Oyu Tolgoi copper mine ramps up production in Mongolia.

Rio Tinto has not publicly said Northparkes is on the block, and new Chief Executive Sam Walsh told shareholders he wanted to keep the asset sale process under tight wraps, reiterating that the company was not going to give away anything.

"This is not a fire sale," Walsh said at the group's annual meeting in Sydney this week.

(Reporting by Sonali Paul; Additional reporting by Denny Thomas in HONG KONG and James Regan in SYDNEY; Editing by Clarence Fernandez)

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