Rio completes asset sale, mulls Argyle restart

Rio Tinto has wiped a further US$1.95 billion (A$2.2 billion) from its debts, after selling Alcan Packaging’s pharmaceuticals, tobacco, food Europe and food Asia divisions to Amcor.

According to the company's chief financial officer Guy Elliot, the company has now completed US$5.6 billion (A$6.3 billion) worth of divestments since the beginning of 2009.

"These were completed despite a difficult environment created by the global financial crisis," he said.

"These proceeds, together with our successful rights issues and strong underlying cash flows, provide us with the flexibility to pursue value adding investment opportunities as they arise."

However the company still has a long way to go to reduce its net debt, which at the end of June last year was reported to be US$39.1 billion (A$44.2 billion).

Since February 2008, Rio has completed US$8.7 billion (A$9.8 billion) of divestments out of a total of US$10.3 billion (A$11.6 billion) proposed sales.

Meanwhile, the company is reportedly considering restarting its underground Argyle diamond mine in Western Australia’s East Kimberley region.

Rio began building the underground operations in 2006 after the open pit mining had slowed.

However, the mining giant postponed the operations last year because of its debts and low commodity prices.

"We are hopeful of being able to start it but that depends on the approval of our investment committee," Rio’s chief executive for diamonds and minerals Harry Kenyon-Slaney said.

"We are continuing to work on how and when the restart might take place.

"We have been encouraged by the recovery in the diamond market in recent months.”

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