Business & Finance

Rio Tinto Announces Purchase of Cargill's Australian Salt Operation

BusinessWire - July 20th, 2001

Dampier Salt Limited, a majority-owned company of resources giant Rio Tinto Limited, has reached agreement with Cargill Australia Limited regarding the purchase of Cargill's salt operation located at Port Hedland, Western Australia for US$95 million, plus contingent performance-based payments payable over a number of years, not to exceed US$15 million in aggregate.

The Port Hedland operation presently produces and exports around three million tonnes of salt per annum. The acquisition will significantly expand Dampier Salt's current production capacity of approximately five million tonnes per annum from its Dampier and Lake MacLeod salt operations, and make it the world's largest salt exporter. The sale agreement is subject to Western Australian government approvals.

Dampier Salt's Managing Director, Mr Hubie van Dalsen, said, "The Port Hedland purchase represents an excellent opportunity for Dampier Salt to strengthen its position in the Asian bulk salt market. The international salt industry is highly competitive and the acquisition of this operation will enable us to offer even greater reliability of supply to our customers".

Dampier Salt will be offering employment to all current site employees of the Cargill's Port Hedland operation.

Dampier Salt's production is exported, principally to Asia, with its largest customers in the chemical industry in Japan, Korea, Taiwan and Indonesia. A proportion of output is used for food processing and domestic consumption in Malaysia and the Philippines.

The other shareholders in Dampier Salt are Marubeni Corporation (20.5%), Nissho-Iwai (10.1%) and Itochu Corporation (4.5%). Rio Tinto established the Dampier salt field in 1972 and purchased the Lake MacLeod operation in 1978. Dampier Salt also has a gypsum operation at Lake MacLeod.

Cargill Australia Ltd is wholly-owned by Cargill Inc., a private company with significant salt interests in North and South America.