Rio Tinto Ltd has reached an agreement to sell its 80% stake in the Northparkes gold and copper to China Molybdenum Co Ltd.
In a statement to the Australian Securities Exchange, Rio Tinto said it would sell its holding for $US820 million ($A884.249 million).
Rio Tinto chief financial officer Chris Lynch said the sale represented "great value" for shareholders and demonstrates the group's continued focus and discipline in the allocation of capital.
"Northparkes is a successful business but is not of sufficient size to be a good fit with our strategy," Rio Tinto chief financial officer Chris Lynch said (see Tim Treadgold's Re-examining Rio).
"We believe it will have a strong future under its new ownership.
"Rio Tinto will continue to manage Northparkes to the highest safety and environmental standards during the transition to the new owner."
The sale of Rio Tinto's Northparkes holding follows the group's recent divestment of the Eagle nickel project in the United States.
"As always, any decision to sell is driven by our focus on delivering the best value for our shareholders," Mr Lynch said.
While Rio Tinto said it expected the sale to be closed by the end of the year, it also noted the transaction was subject to its joint venture partners Sumitomo Metal Mining and Sumitomo Corporation Mineral Resources, waiving or failing to exercise their pre-emption rights under the terms of the Northparkes Joint Venture Agreement.
The sale is also conditional upon the approval of CMOC shareholders, though Rio Tinto said it had received binding commitments from the two major CMOC shareholders holding 69 per cent of CMOC shares to support the transaction.
Customary regulatory approvals will also need to be obtained.