Rio signs deal to exit Grasberg

RIO Tinto and Freeport-McMoRan have signed a US$3.85 billion deal with PT Indonesia Asahan Aluminium (Inalum) over the giant Grasberg copper mine in the Papua province.

Rio signs deal to exit Grasberg Rio signs deal to exit Grasberg Rio signs deal to exit Grasberg Rio signs deal to exit Grasberg Rio signs deal to exit Grasberg

Grasberg

The Indonesian state-owned firm will pay $3.5 billion to Rio Tinto for its complete interest in the mine, and $350 million to majority owner Freeport for an additional 9.36% stake.

Freeport and the Indonesian government came to an agreement last August after a long-running dispute, while Rio has reportedly been looking for an exit from the mine since October last year.

Rio owns the right to 40% of Grasberg's production above a pre-agreed level and 40% of all production after 2022. In 2017, Rio claimed 5700 tonnes of the total 468,000t production.

Macquarie said Rio's sale price was $900 million above its estimates.

"We view the outcome as a positive for Rio with the deal expected to be completed before the end of 2018," Macquarie said.

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