UPDATE 1-Rio draws up shortlist for Canada iron ore sale-sources

Mon Jun 3, 2013 8:54am EDT
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* Rio has 5-6 name shortlist for Iron Ore of Canada stake

* Values stake at between $3.5 bln and $4 bln

* Rio focusing on key assets, selling non-core ops

* Appointed advisers to sell stake three months ago

By Jackie Range and Anjuli Davies

SYDNEY/LONDON, June 3 (Reuters) - Mining group Rio Tinto Plc has drawn up a shortlist of half a dozen suitors for its majority stake in Canada's largest iron ore producer, sources with knowledge of the situation said on Monday.

Rio values Iron Ore Co of Canada (IOC) at around $8 billion and is seeking between $3.5 billion and $4 billion for its stake, one of the sources said - roughly double industry estimates when the asset was earmarked for sale earlier this year.

Like some rivals, Rio has promised to focus on its key assets and sell non-core operations as it wrestles with a $19 billion debt burden, sluggish demand and weaker prices.

But a dearth of serious suitors and poor offer prices have restricted disposals - factors which could still hamper the sale of Rio's 59 percent holding in IOC, even with suitors circling.   Continued...