Greens Creek Mine put up for sale

Company scoping market for buyer willing to pay premium

Posted: Thursday, November 22, 2007

The company that owns a majority stake in Greens Creek Mine on Admiralty Island announced Tuesday it is looking into selling its share of the property if it can fetch a premium price.

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The multimetal mine's general manager, Clayton Walker, said the move will not affect mine operations and all 325 employees can expect to continue their jobs.

"We are a healthy mine. They just want to go out and test the market and explore and see if anyone wants to pay a premium. If someone is willing pay us a premium, I think we'd be willing to move the property," Walker said.

The mine, about 20 miles west of downtown, is the highest valued property within the city of Juneau, with an assessed value of $112 million on the city's tax rolls. The mine is particularly valuable now because of historically high prices for minerals.

Walker declined to say what price the mine is asking for.

The mine is a joint venture of Kennecott Minerals, based in Salt Lake City, Utah, and Hecla Mining Co., based in Coeur d'Alene, Idaho. Kennecott is a subsidiary of London-based Rio Tinto, a global minerals company.

Rio Tinto, which owns a 70 percent stake in the mine, is one of the largest mining companies in the world. Rio Tinto has said it is looking to raise at least $10 billion through divesting. The company acquired Alcan, an aluminum company, in July. It is also selling Rio Tinto Energy America, the second largest U.S. coal producer by tonnage, and Rio Tinto Minerals' talc assets.

Rio Tinto is being pursued by an even larger mining company, BHP Billiton. Rio Tinto has rejected a buyout offer, but the company plans on continuing its pursuit, a BHP statement this month said.

Walker said the move has nothing to do with the BHP offer, but is part of a strategy set in July after the acquisition of Alcan.

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

The underground mine focuses on silver, gold, zinc and lead. It began operation in 1989. The mine was placed on standby in 1993 and began operating again in 1996 following a $114 million modernization and redevelopment investment.

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