Greens Creek metals mine goes on block

Rio Tinto Plc, parent of the company that owns a majority of the Greens Creek Mine, said it would like to sell the Southeast Alaska investment.

The move, however, is not expected to affect the profitable zinc, lead and silver mine's operations on Admiralty Island, nor its 325 employees, according to Clayton Walker, the mine's general manager.

London-based Rio Tinto, which owns a 70.3 percent stake in the mine, is one of the largest mining companies in the world. Rio Tinto has said it is looking to divest a number of its assets, including Greens Creek, in an effort to thwart the unwelcome attentions of rival mining giant, BHP Billiton, which recently launched a three-for-one share takeover offer for Rio Tinto.

U.S. private equity giant Blackstone, meanwhile, is said to be putting together its own bid for Rio Tinto, a play that reportedly will involve a Chinese sovereign wealth fund.

Rio Tinto has identified up to $30 billion in assets it believes will drive shareholder value as part of its defense against BHP's offer. These include a talc business, uranium projects in Australia and the United States, the Northparkes copper and gold mine in Australia and Greens Creek This marks the third time Rio Tinto has consider selling the 15-year-old Greens Creek.

Mining industry analysts say Rio Tinto CEO Tom Albanese appears to be determined to rebuff BHP Billiton, and they see Greens Creek being added to a list of Rio Tinto assets up for sale as a sign of that determination.

Greens Creek is where Albanese started his career at Rio Tinto. He is credited with successfully reviving the Southeast Alaska operation.

"Every time I see Greens Creek on that list, a tear comes off my eye having worked there and got it back up and running," Albanese told a reporter recently. But he added: "We have to be careful that we aren't emotionally attached to anything."

Albanese describes the whole potential merger with BHP as an onion with multiple layers, with the first and most important layer being value, or price.

When asked whether the merger with BHP is inevitable, Albanese replied: "Nothing is inevitable."

Mine plays important role in Southeast

Greens Creek, meanwhile, continues to play an important role in the Southeast Alaska economy. The mine, 18 miles southwest of downtown Juneau, is the city's highest valued property at $112 million, according to city tax rolls.

Walker declined to say what price Rio Tinto is asking for its share of the mine.

"No final decisions have been reached, and any sale process will likely take months and the possibility remains that no sale will occur," he said in a statement. "Greens Creek is a safe, healthy, and valuable business asset, and would therefore require a very favorable bid."

The underground mine produces silver, gold, zinc and lead. It is a joint venture of Rio Tinto subsidiary, Kennecott Minerals of Salt Lake City, Utah, and Coeur d'Alene, Idaho-based Hecla Mining Co., which owns 29.7 percent of the mine.

Greens Creek has 7.6 million tons of estimated reserves and is expected to produce commercial quantities of ore for at least another decade.

In September, Greens Creek set a record for the largest monthly ore concentrate shipment in its history, the result of unusual timing between mining and shipping schedules, the company said.