Rio Tinto, the Anglo-Australian mining company headquartered in London, is reportedly preparing for the public listing of its Iron Ore Company of Canada unit, planned for the first half of 2019. Apparently, the company would be dual-listing the business in Toronto and New York.
Sources with knowledge of the matter suggested that Rio Tinto, which is the second-biggest listed miner in the world, is targeting nearly a $4 billion valuation. It has hired Credit Suisse, Royal Bank of Canada and JPMorgan Chase for leading the IPO, the plans for which would be dependent on the market conditions improving.
For the record, Iron Ore Company of Canada has operations in Newfoundland and Labrador, making it a major iron ore producer in the country. Rio Tinto holds a 58.7% share of the company, while Mitsubishi Corp from Japan and Canada’s Labrador Iron Ore Royalty Co. own 26.2% and 15.1% stake respectively. In 2017, the business had reported $1.9 billion in revenues.
Rio has not been able to monetize Iron Ore Company of Canada in its earlier attempts and is hoping to get it right with the decision to go public, the sources stated. According to previous reports, Rio had tried to sell its stake in IOC in 2012-2013 but had failed, while this year the company was unsuccessful in closing a sale of its share in the Simandou iron ore project in Guinea.
Representatives from Rio Tinto did offer any comments on the reports. Experts have mentioned that with high volatility levels, global markets have witnessed a fall due to concerns surrounding economic growth and geopolitical risks.
Sources added that after a commodity price crash that occurred in 2015, Rio had put several of its assets on the block to reduce its debt. The accelerated IPO plans for Rio Tinto represent the eagerness of potential IPO candidates to list business early in 2019, owing to fears that market conditions could deteriorate later in the year.