Rio Tinto (LON:RIO) has inked a deal to offload its interest in the Grasberg copper mine to Indonesia's state mining company, the blue-chip company has said. The deal comes ahead of the FTSE 100 group’s quarterly operations review on Tuesday, July 17, to be followed by the company’s half-year results on August 1.
Rio Tinto’s share price has slipped marginally lower in London in today’s session, having given up 0.15 percent to 4,016.00p as of 14:33 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.68 percent higher at 7,643.38 points. The group’s shares have added more than 16 percent to their value over the past year, as compared with an over three-percent rise in the Footsie.
Grasberg mine deal
Rio Tinto announced in a statement today that it had signed a non-binding agreement alongside partners PT Indonesia Asahan Aluminium and Freeport McMoran in relation to the Grasberg mine in Indonesia. The agreement details the terms of for the sale of the FTSE 100 group’s entire interest in Grasberg to Inalum, Indonesia's state mining company, for $3.5 billion, and sets out a proposed transaction between Freeport McMoran and Inalum for the latter to buy an additional stake in Grasberg as well as additional terms relating to the future ownership and operation of Grasberg.
Rio noted in the statement that all parties had committed to work towards agreeing and signing binding agreements before the end of the second half of the year.
Analysts on Rio Tinto
HSBC, which rates the blue-chip miner as a ‘buy,’ set a price target of 4,950p on the stock today. According to MarketBeat, the company currently has a consensus ‘hold’ rating and an average price target of 4,259.72p.