Rio Tinto announced that it has agreed to sell its 80 percent stake in the Northparks copper and gold mine to China Molybdenum Co. for US$820 million.

The sale of the Australian mine is another step in Rio Tinto's attempt to reduce debt, the Wall Street Journal reported.

Rio Tinto said it had reached a binding agreement to sell its 80 percent stake in the Northparkes mine to the Chinese company, which produces molybdenum and tungsten, ingredients used in steelmaking. Sumitomo Corp. subsidiaries that hold the remaining 20 percent of the mine have the right to match the offer, and the deal is subject to Australian regulatory approval.

Rio Tinto is slashing costs and spending to cut debt that swelled to almost US$19 billion last year, and to protect its single-A credit rating. Like rival mining companies, including BHP Billiton Ltd. and Glencore Xstrata PLC, it is seeking to sell smaller or struggling assets as prices of commodities such as copper and coal remain weak, due largely to slower growth in China's economy.

Analysts at Macquarie Group told the Wall Street Journal that the Northparkes deal would allow it to focus on more core operations like iron ore mines in the resource-rich state of Western Australia, and a new copper-and-gold deposit in Mongolia. Northparkes, in New South Wales state, became operational in 1994 and produced about 43 kt (47,000 st) of mined copper for Rio Tinto last year.

"Northparkes is a successful business but is not of sufficient size to be a good fit with our strategy," said Chris Lynch, Rio Tinto's chief financial officer.

Rio Tinto agreed to sell a nickel-and-copper mining asset in the U.S. to Toronto-based Lundin Mining Corp. for about US$325 million in June. It was the company's first asset sale since Sam Walsh took over as chief executive in January, seeking to reduce costs by more than US$5 billion by the end of next year.

Rio Tinto has a basket of other assets up for grabs. They include aluminum operations in Australia and New Zealand, stakes in coal-mining assets in Australia, and iron-ore mines in Canada. Still, last month it abandoned plans to sell or list its diamond business—which includes mines in Australia, Canada and Zimbabwe—amid tepid interest from buyers.