Australia’s foreign investment board has approved China Molybdenum’s purchase of a majority stake in the Northparkes copper mine from Rio Tinto, clearing a significant hurdle for the US$820 million deal.

Rio Tinto said on Monday it had agreed to sell 80 per cent of the Australian copper mine to the Chinese company, which also would be its first investment offshore.

“The acquisition of an established tier-one mine such as Northparkes provides us with an ideal international platform for growth, and is consistent with our strategy of becoming a base, specialty and precious metals producer of global scale,” China Molybdenum Chairman Wenjun Wu said in a statement.

The deal provides an opportunity for China Molybdenum to acquire a substantial, low-cost producing copper and gold mine based in a stable mining jurisdiction.

The stake in Northparkes is one of several assets that Rio has put up for sale as it aims to slash $5 billion in costs, pare debt and focus on its biggest, most profitable mines.

Northparkes is Australia’s fourth-largest producing copper mine, based on last year production figures.

It produced 53.8 thousand tonnes of contained copper in concentrate and 72.2 thousand ounces of contained gold in concentrate last year at a net cash cost of approximately $1.07 per pound of copper.

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