Rio Tinto awaits first-round bids

Mining giant Rio Tinto is set to find out whether its mineral unit attracts interest despite the credit crunch when first-round bids for the business land by the end of this weekend. The business, which produces borates, talc and salt and could fetch more than $1m bn, is one of those being sold by the Anglo-Australian miner as it looks at paying down debt and focussing on its core mining operations.

France' Imerys is the most logical bidder for the minerals unit as it operates in the same market. However the French company may struggle to meet the price tag for the business because it already has a lot of debt on its books and a small market value of under 2 billion euros. Other likely bidders are North American companies such as Canada's Teck Cominco, or buyout firms. Among potential buyout bidders are Apollo, CVC and First Reserve, although private equity may also struggle to raise enough finance to make a bid worthwhile.

Rio had initially decided to sell the business among several assets sales it was undertaking as it tried to defend itself from an unsolicited takeover offer by rival BHP.

BHP pulled its bid earlier this week, but Rio still plans to push ahead with its sales if it is able to fetch a good price. Other larger asset sales Rio Tinto is conducting include its engineering business and its packaging unit.

But the disappearance of the threat of a bid by BHP means it is under less pressure to sell the business and may opt to warehouse it until markets recover if the bids it receives are too low. The sale process for the business, which operates across the world in North America, Asia, and Europe is not expected to conclude before 2009.Rio Tinto declined to comment.