". . .Teck is once again considering iron ore acqu
Dented by aluminum, Rio Tinto aims to unload Iron Ore Co.
. . .
Rio’s 58.7-per-cent interest in Iron Ore Co. of Canada is up for sale and the company has hired investment bankers to facilitate a transaction, according to two sources familiar with the matter.
The banking firms hired are understood to be Credit Suisse and CIBC World Markets. One source said Rio is aiming for a quick deal.
London-based Rio’s stake in IOC could be worth as much as $3.5-billion to $4-billion. Japan’s Mitsubishi Corp. controls 26.2 per cent of IOC and the remaining 15.1 per cent is held by Labrador Iron Ore Royalty Income Corp.
A Rio spokesperson declined to comment. However, Mr. Walsh, asked recently by an analyst about the company’s willingness to sell its stake in IOC said, “I am looking hard at divestments. There are a number of assets for us that are not core or they are underperforming.”
Prospective buyers could include Canada’s Teck Resources Ltd. The Vancouver company, led by CEO Don Lindsay, is Canada’s biggest diversified mining firm and has long coveted the IOC operations as a potential entry point into iron ore production. Teck is already the world’s second-largest exporter of seaborne coking coal used in steel production. Iron ore is the other primary ingredient needed to make steel.
Like Rio, Teck has been kept from making major asset purchases owing to its own ill-timed takeover deal. In 2008, just as the global financial crisis walloped credit markets and the international economy, Teck completed a $14-billion takeover of Fording Canadian Coal Trust. The deal almost sank the company, but a minority investment in the Canadian miner by China’s sovereign wealth fund China Investment Corp. and other savvy moves by Mr. Lindsay kept Teck afloat.
During a call with analysts following Teck’s most recent quarterly financial report, Mr. Lindsay signalled Teck is once again considering iron ore acquisitions.
“I enjoyed a good holiday from iron ore for quite a few weeks there, but values have come down,” Mr. Lindsay said, according to Reuters. “There’s a few new assets that have come available, so we still think that’s a good fit in our portfolio.”
. . .
https://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/rio-tinto-seeks-buyer-for-canadian-iron-ore-firm/article9201005/