UPDATE 1-Rio Tinto to give away stake in Alaska mine developer

Mon Apr 7, 2014 9:34am EDT

(Adds detail on charities, context on Pebble project.)

TORONTO, April 7 (Reuters) - Global miner Rio Tinto said on Monday it will give away its 19.1 percent stake in Northern Dynasty Minerals Ltd, owner of Alaska's huge Pebble deposit, after determining that the project does not fit its strategy.

Rio is donating its shares to two Alaskan charities, the miner said.

The move is a fresh setback for a project that environmental regulators are looking to block.

In February, the U.S. Environmental Protection Agency initiated a rarely used process under the Clean Water Act that would block development of the copper-gold deposit, one of the largest in the world, citing the potential of "irreversible harm" to the state's salmon fishery.

Rio said in December it was considering selling its stake . In September, a second global mining group, Anglo American Plc, pulled out of the project.

Half of Rio's shares will go to the Alaska Community Foundation and the other half will go to the Bristol Bay Native Corporation Education Foundation, the company said.

Northern Dynasty said it would meet with the leaders of the charitable foundations "to better understand their long-term goals and aspirations." (Reporting by Allison Martell; Editing by Frank McGurty and Nick Zieminski)

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