Rio Tinto said to seek sale of some critical minerals assets in US

Rio Tinto is seeking to divest its US assets that produce boron, a critical mineral used in various applications ranging from fertilisers to glass making, according to people familiar with the matter.

The Anglo-Australian company is expected to start a sales process for the California assets in the next two weeks, said the people, who asked not to be named discussing private information. Buyers are likely to be private equity firms or chemical producers, the people said.

The business includes a mine and processing operations in the Mojave Desert town of Boron, as well as a refinery and shipping facility in Los Angeles port and its Owens Lake mining operation near Sierra Nevada.

Rio’s California operations meet about 30 per cent of global demand for boron, according to the company’s website.

Boron has a wide variety of industrial applications, including in fertiliser, glass and ceramics manufacturing, fiberglass insulation and for strengthening metal alloys. Boron is also key to stabilising permanent rare-earth magnets, used in motors, generators and electronics.

The US and Turkey are the world’s largest producers of the mineral, according to the US Geological Survey, with American production solely in California. The USGS added boron to its latest list of critical minerals earlier this month.

Rio, which makes nearly all its earnings from iron ore, copper and aluminum, is seeking to simplify is sprawling operations under new chief executive Simon Trott. Since taking the helm three months ago, Mr Trott has reorganised the company into three divisions and ordered a review of the minerals unit, which includes borates.

He is tasked with cutting costs and focusing on Rio’s best assets at a time when major growth projects are coming online.

Rio’s boron assets may fetch as much as $US2 billion ($3.07b), said one of the people.

UBS Group AG and JPMorgan Chase & Co are advising Rio on the sale. Representatives for the investment banks didn’t immediately respond to requests for comment. A Rio spokesperson declined to comment.

The sale process comes as the Trump administration seeks to bolster domestic supply of minerals it considers vital to the US economy and national security. Critical minerals — particularly rare earths — have emerged as a powerful weapon in the trade standoff between the US and China, which controls the world’s supply chain.

That has prompted the US to take stakes in producers at home and in allied nations such as Australia and Canada.

Bloomberg