Rio to sell South Africa project

  • @MLeftly

Rio Tinto is selling its Chapudi coal exploration assets in South Africa for up to $75m (£50m).

The FTSE 100 mining giant has invited bids for the project with a preferred buyer in place, though a source close to Rio insisted that a sale was "one of the opportunities being pursued".

Rio is looking to sell as this is a small asset relative to the company's size and it is likely to be used in the domestic market rather than globally.

Tom Albanese, Rio's chief executive, recently visited South Africa to demonstrate the company's commitment to developing projects in the region. As well as existing joint ventures, the company is looking to develop more mining deposits in the country.

The Chapudi deposit was discovered as part of Rio's exploration of the Limpopo coal basin, which has been undertaken with domestic partner Kwezi Mining.

Rio shares closed at 3172.5p on Friday, up 3.22 per cent on the start of the day's trading. This values the company at nearly £50bn.