Rio Tinto exits massive project

Rio Tinto has withdrawn its investment in one of the world's largest copper deposits.

Mining titan Rio Tinto said Monday it has withdrawn its investment in one of the world's largest copper deposits by gifting its minority stake in Northern Dynasty, the developer of the massive Alaskan Pebble copper and gold project, to two Alaskan charities.

The decision follows a strategic review of its 19.1 per cent stake in Northern Dynasty announced last year, which concluded that the Pebble project didn't fit with Rio Tinto's strategy, the company said.

Rio Tinto is the second large diversified miner to back out of the project in nearly seven months. Anglo American announced in September that it would withdraw from the project by handing its 50 per cent stake in the project back to Northern Dynasty and taking a $US300 million ($322m) writedown in the process.

The project has faced increased scrutiny from environmental campaign groups and the US Environmental Protection Agency regarding its potential risk to salmon fisheries. Northern Dynasty and Anglo American previously said that the project could be built without harming Alaska's salmon fishing industry.

"Rio Tinto has long and historic ties to Alaska and we continue to see Alaska as an attractive location for potential future investment," said Rio Tinto's copper chief executive Jean-Sebastien Jacques in a statement.

"By giving our shares to two respected Alaskan charities, we are ensuring that Alaskans will have a say in Pebble's future development and that any economic benefit supports Alaska's ability to attract investment that creates jobs."

The shares in Northern Dynasty will be divided equally between the Alaska Community Foundation to fund educational and vocational training and the Bristol Bay Native Corporation Education Foundation, which supports educational and cultural programs in the region.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles