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Rio Tinto ponders listing Iron Ore Co. of Canada stake

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Rio Tinto ponders listing Iron Ore Co. of Canada stake

Rio Tinto is pondering a float of its stake in Iron Ore Co. of Canada Inc. on the Toronto Stock Exchange to focus on its flagship iron ore assets in Australia's Pilbara region, Reuters reported Aug. 9, citing banking and industry sources.

While the mining giant owns 59% of the company, it is deemed noncore for Rio Tinto's iron ore business, and the company unsuccessfully sought to sell its stake for between US$3.5 billion and US$4 billion in 2012.

Japan's Mitsubishi Corp. has a 26% interest and Labrador Iron Ore Royalty Corp. holds the remaining 15% interest in Iron Ore Co. of Canada.

Iron Ore Co. of Canada reported steep declines in concentrate production, pellet output and iron ore sales tonnage in the second quarter, largely due to a nine-week strike at its IOC mining operations in Labrador, which ended in late May.

As a result, Rio Tinto cut its full-year attributable pellet and concentrates production guidance at IOC to between 9.0 million and 10.0 million tonnes.

Rio Tinto's plans to publicly list its Iron Ore Co. of Canada stake are allegedly still at an early stage, with one source saying no financial adviser has been hired.

Iron ore forms the bulk of Rio Tinto's profits, comprising more than 60% of its 2017 earnings.