UPDATE 1-Nyrstar to sell its stake in Chinese joint venture

(Adds detail on potential loss)

BRUSSELS, Oct 13 (Reuters) - Belgium's Nyrstar, the world's biggest zinc producer, said on Monday that it had reached conditional agreement to sell its 60 percent stake in Chinese joint venture Yunnan Zinc Alloys.

The group plans to sell its stake in the 55,000-tonne zinc smelter in Kunming, China to its Chinese joint venture partner, Yun Tong Zinc.

As required under Chinese law, the sale must be valued by a Chinese state valuer.

Provided the valuation, as well as the sale price, is no less than 87 million renminbi, approximately 9 million euros,($12.35 million), the deal would close by the end of March 2009 at the latest, the group said.

It added however that if the valuation is less than 87 million renminbi, the sale will not proceed unless the parties agree otherwise.

At a price of 87 million renminbi, Nyrstar said it would incur a loss of approximately 24 million euros on the sale. (Reporting by Antonia van de Velde; Editing by Hans Peters)