According to Mining News Pro -Rio Tinto has formalised the agreement to sell its copper interest in the Grasberg gold-copper mine to Indonesian state mining company PT Indonesia Asahan Aluminium (Inalum) for $US3.5 billion ($4.8 billion).

Grasberg, located in Papua, Indonesia, is the world’s largest gold mine in terms of contained gold, as well as being one of the biggest copper mines in the world.

It is majority owned by Freeport Indonesia, a subsidiary of Phoenix, Arizona-based mining major Freeport McMoRan.

Freeport-McMoRan holds a 90.64 per cent interest in Grasberg, while the Indonesian Government owns the other 9.36 per cent.

Rio Tinto signed an agreement in 1996 for 40 per cent of Grasberg production above an agreed level and 40 per cent of all production from 2022.

The company’s results from the Grasberg interest have been disappointing for the past few years.

In Rio Tinto’s 2017 full year report, the company reported a $US169 million ($233 million) loss from the joint venture for the year ending December 2017.

The company also posted net losses of $US64 million for the year ending 2016, $US34 million in 2015 and $17 million in 2014.

In 2017, Rio Tinto received 5700t of copper from a total production of 14,300t, its first return from Grasberg since 2014.

The mine is in the final phase of a transition from an open cut mine to an underground operation, with ramp up expected by 2022.