CHINA Molybdenum Co has agreed to buy an 80 percent stake in the Northparkes mine in Australia from Rio Tinto for US$820 million, in its first foray into copper assets.

Rio Tinto has been selling assets to bolster its balance sheet in response to weaker commodity prices. The Anglo-Australian mine company has recently completed the divestment of the Eagle nickel project in the US.

"Northparkes is a successful business but is not of sufficient size to be a good fit with our strategy," Rio Tinto Chief Financial Officer Chris Lynch said in a statement today. "As always, any decision to sell is driven by our focus on delivering the best value for our shareholders."

The Northparkes mine, in New South Wales, produced about 54,000 tons of copper in 2012.

Rio's joint venture partners, Sumitomo Metal Mining and Sumitomo Corp Mineral Resources, which own the remaining 20 percent in Northparkes, have the right to match China Molybdenum's offer, Rio said.

China Molybdenum, based in Luoyang, Henan Province, is a major producer of molybdenum and tungsten, used to harden steel. Its shares have been suspended in Shanghai and Hong Kong today.

The Chinese company outbid companies including Australian copper miner OZ Minerals, which had been seen as the mostly likely buyer but which was under pressure from shareholders not to overpay.