Rio Tinto sells $3.5bn stake in Grasberg mine to Indonesian state miner

World’s No.2 miner Rio Tinto (ASX, LON, NYSE: RIO) said Thursday it had sold its 40% stake in the giant Grasberg mine, the world’s second largest copper operation, to Indonesia's state mining company PT Inalum for $3.5 billion.

Rio had a joint venture with Freeport-McMoRan (NYSE:FCX), operator of Grasberg, for a 40% share of Grasberg's production above specific levels until 2021 and 40% of all production after 2021.

Freeport separately said it will receive $350 million from PT Inalum after the stake sale.

The agreement will give Indonesia control of the mine and so end a long-dragged battle over the mining rights for the site.

More to come…