Rio Tinto launches its multibillion-dollar sale of its non-core assets

Rio Tinto has sent out promotional material to generate pre-Christmas interest. Picture: Getty Images

Rio Tinto is trying to get promotional material out before Christmas for the sale process of its non-core assets which are worth billions of dollars, say sources.

Most likely buyers of the assets are expected to be private equity firms that focus on the resources space.

Magnus Minerals could be among the buyers, say sources.

Working on the sale are believed to be UBS and JPMorgan, and it’s understood that they already have reached out to prospective bidders.

Sources say that Rio Tinto wants to sell the non-core assets all in one line to one buyer.

However, some think this could be challenging, given the eclectic nature of what’s on offer.

The largest asset is its mineral sands operation which produces titanium and is being shopped to prospective suitors internationally.

Sources believe the business could sell for about two to three times its earnings before interest, tax, depreciation and amortisation.

The business generates between $600m and $700m in annual earnings.

Rio owns mineral sands assets in South Africa, which is the Richards Bay Minerals business, Madagascar Minerals, and Canada where it owns the Sorel-Tracy operations in Quebec.

As earlier reported, new chief executive Simon Trott recently flagged that its borates and iron and titanium businesses (mineral sands) were non core and it would sharpen its focus on iron ore, copper, aluminium and lithium.

The asset sales will fund debt payments and capital spending.