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Rio Tinto sells Alcan packaging

RIO Tinto has sold a division of its Alcan unit for US$1.2 billion as it continues to reduce debt, the Anglo-Australian miner said in a statement yesterday.

The deal to sell its Alcan Packaging Food Americas division to United States-based Bemis Company Inc is subject to regulatory approvals and US$200 million of the total price may be in the form of Bemis shares.

The move is the latest by Rio to reduce its debt, which is about US$23.9 billion after raising fresh capital last week through a share issue. Rio incurred significant debt in its 2007 purchase of Canadian aluminum giant Alcan Inc for US$38 billion.

"The sale of the Food Americas division is the first significant step in reducing the asset portfolio acquired with Alcan," said Guy Elliott, Rio Tinto's chief financial officer. "The transaction represents solid value given the challenging financial environment."

This year Rio Tinto has announced a total of US$3.7 billion of asset sales, including its Brazilian iron ore operations.

Rio Tinto shares closed 2.2 percent lower at A$48.50 (US$38.34) in Sydney.


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