Chinese producer snaps up Northparkes mine

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 23 Aug 2013   Posted by admin


WORKERS at Northparkes gold and copper mine have been reassured of their jobs by new owner China Molybdenum, after it purchased Rio Tinto’s 80 per cent stake in the operation for US$820 million.
The deal – which still has to be ratified by shareholders and regulators – is the company’s first foray into copper, however Rio Tinto chief financial officer Chris Lynch said it would give the NSW mine a strong future.
“The sale of Northparkes represents great value for our shareholders and demonstrates our continued focus and discipline in the way we allocate capital across the group,” Mr Lynch said.
“Northparkes is a successful business but is not of sufficient size to be a good fit with our strategy.
“Rio Tinto will continue to manage Northparkes to the highest safety and environmental standards during the transition to the new owner.
“As always, any decision to sell is driven by our focus on delivering the best value for our shareholders.” China Molybdenum chairman Wenjun Wu said the transaction was a unique opportunity to buy a substantial, producing mine in a stable country.
“The acquisition of an established tier one mine like Northparkes provides us with an ideal international platform for growth, and is consistent with our strategy of becoming a base, speciality and precious metals producer of global scale,” Mr Wu said.
“Northparkes will contribute significant copper and gold production to the company, and provide us with the opportunity to leverage our operational skills and business relationships to add value to the asset.
“We intend to continue investing in Northparkes to help the mine achieve its full potential.”
Mr Wu said there would be no major staff changes at the mine.
“The skills and values of the existing workforce are evident to us,” he said. “We intend to retain the existing management team and employees, and operate Northparkes as an independent standalone operation.
“We are looking forward to drawing on the best health, safety and environmental practices of Northparkes and our existing operations, and we recognise the importance of continuing to operate a safe business in an
environmentally sustainable manner.
“Further, we understand and respect the importance of the mine to the people of the surrounding communities, including the towns of Parkes and Forbes, and look forward to working closely and building collaborative relationships with the local communities.”
Northparkes is Australia’s fourth largest producing copper mine. In 2012 the mine produced 53,800t of copper concentrate, 72,200oz of gold concentrate and had a net cash flow of $1.07 per pound of copper.
Rio Tinto had been trying to sell the mine since April in an effort to slash $5 billion in costs and focus on its biggest and most profitable mines. The transaction is expected to be finalised by the end of the year.