Mining firms Rio Tinto and Anglo American plc will divest their combined 74.5 % stake in Palabora Mining Company Limited, whose principal asset is a copper mine in South Africa.

Rio Tinto and Anglo American made separate announcements declaring their intention to the board of Palabora to divest their respective shareholdings from the company.

Bloomberg reported that the value of the combined holding of Rio Tinto and Anglo American is about $700 million, basing its computations on the closing stock price of Palabora .

Rio Tinto said it has initiated a commercial process to sell its 57.7 percent equity while Anglo American said it will participate in Rio Tinto's sale process for its 16.8 percent stake.

"Rio Tinto is no longer the natural owner of Palabora due to the limited opportunity to significantly expand copper mining. We believe Palabora has a solid future under an owner who can develop the magnetite business alongside the existing copper and vermiculite operations," Rio Tinto Copper chief executive Andrew Harding said in an issued statement.

Palabora's principal asset is a copper mine in South Africa, which has a current mine life until early 2016.

Rio Tinto said studies are underway for a potential extension of the mine's life to 2030 but it is no longer of sufficient scale to fit with the
company's strategy.

Palabora also owns a magnetite stockpile and the future of value creation at Palabora is likely to involve beneficiation of the magnetite through on-site processing, an activity that is outside Rio Tinto's strategic focus, it said.

"In the meantime Rio Tinto will continue to focus on running the operations efficiently and safely. We will continue engaging with employees, the South African Government and other stakeholders as the sale process develops and to ensure a smooth transition to a new owner," Harding said.

Rio Tinto is engaged in mining, and processing mineral resources. It is headquartered in the UK, combining Rio Tinto plc, a London and New York Stock Exchange listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Anglo American, meanwhile, is one of the world’s largest mining companies. It is based in the UK and listed on the London and Johannesburg stock exchanges.