Rio Tinto sells Northparkes mine stake for $820m Rio Tinto's Northparkes mine in Parkes, New South Wales, Australia Rio Tinto has sold its controlling stake in the Northparkes copper-gold mine in New South Wales to China Molybdenum for $820m as part of efforts to reduce debt. The 80 per cent stake is one of several assets the Anglo-Australian mining company has put on the block in an effort to bolster its balance sheet and protect its prized single-A credit rating. The purchase is one of the biggest this year by a Chinese company of a mining asset. China Molybdenum will gain control of an operation that produced almost 54,000 tonnes of copper last year and 72,000 ounces of gold. One of the largest shareholders in China Molybdenum is Chinese private equity group Cathay Fortune, which has been involved in a long-running takeover battle for Discovery Metals, another Australian copper miner. State-owned Luoyang Mining is another large investor in China Molybdenum. China considers copper, which is used in almost all electric wiring, a strategic metal. The country's powerful stockpiling agency, the State Reserve Bureau, has been making inquiries in the market looking to buy copper. Chris Lynch, Rio's chief financial officer, said the disposal of the controlling interest in Northparkes represented "great value for our shareholders." "Northparkes is a successful business but is not of sufficient size to be a good fit with our strategy," he said. Sam Walsh, Rio chief executive, has promised "significant cash proceeds" from the sale of non-core businesses in 2013 and has pledged to strip out more than $5bn of costs by the end of 2014. However, the disposal programme, which is aimed at reducing net debt of $19bn, has got off to a slow start. Rio recently sold a nickel and copper project in the US for $325m, but it abandoned the sale of its diamond business last month after failing to find a buyer. Like its rivals, Rio has responded to weaker commodity prices, rising costs and a more uncertain outlook for growth in China, the world's largest consumer of commodities, by reducing spending and attempting to sell smaller operations. Analysts expected the Northparkes stake to fetch between $800m and $1bn. But the sale to Hong Kong-listed China Molybdenum, which has a market value of $5bn, was unexpected. Oz Minerals had been seen as the most likely buyer, but the Australian copper miner was under pressure from shareholders not to overpay even though the purchase would have filled a production gap. Shares in the company fell sharply on Monday after it said would take an asset impairment charge of up to A$240m, blaming falling copper and gold prices. The price of copper for delivery in three months" time hit a three-week low on Monday on concerns a slowing Chinese economy could hit demand. Gold prices, meanwhile, have fallen by a fifth this year as signs of an economic recovery in the US have raised the prospect of an end to ultra-loose monetary policy. Rio said it expected the deal, which comes as Glencore Xstrata tries to find a buyer for its US$5bn Las Bambas copper mine in Peru, to be completed by the end of the year. It is subject to regulatory approval and conditional on Rio's joint venture partner in the mine, Sumitomo Corp, waiving its right to match the offer. Separately, Rio Tinto said on Monday that all work on underground development at its huge Oyu Tolgoi copper mine in Mongolia was on hold after the government said the terms of $4bn of provisionally secured project financing must be approved by parliament, which is now in recess until October. "In view of the current uncertainty, including continued discussions with the government on a range of other issues, all funding and work on the underground development will be delayed until these matters are concluded and a new timetable has been agreed," Rio said. Rio had agreements in place from banks to support the financing of the underground expansion, at least some of which are due to expire in August. Full production at Oyu Tolgoi is not expected until 2021, with the underground part expected to start operations in 2016. Shares in Rio closed down 0.1 per cent at A$57.11 in Sydney on Monday.