MINING giant Rio Tinto boosted its cash position yesterday, selling its Americas food packaging company to US group Bemis $1.2bn (£740m). Rio said that $200m of the sale proceeds may be in the form of Bemis shares.<br />Rio, which last week raised $15.2bn through a massively discounted rights issue, is looking to slash the debt it took on in 2007 through its acquisition of $38.1bn Canadian aluminium group Alcan.<br /><br />“The Alcan acquisition was much criticised at the time and with hindsight was made at the peak of the market,” Barclays Wealth’s Thuy Quynh Dang said.<br /><br />Rio is racing to cut its net debt by $10bn by the end of 2009.<br /><br />Some of the cash was meant to be paid off soon after the Alcan acquisition, by selling off the company’s assets fast, but plans were halted by the worldwide recession.<br /><br />Rio said yesterday the sale of the arm was the first “significant step in reducing the asset portfolio acquired with Alcan.”<br /><br />“The sale won’t make a huge dent in Rio’s debt, but a billion here, a billion there, soon we’re talking real money,” Edison Investment’s Charlie Gibson said. “The sale also allows Rio to focus on its more core assets,” he added. The mining giant added that it is still planning to sell the remainder of Alcan Packaging, as well as Alcan Engineered Products.<br /><br />In February, the dual-listed company announced plans to tie-up with its major shareholder Chinalco, in a deal which would have seen Rio receive a $19.5bn investment from the Chinese state-owned company.<br /><br />Chinalco would have doubled its stake in Rio to 18 per cent. But last month, after investors threatened to vote the deal down, Rio’s chief executive Tom Albanese jilted the Chinese group in favour of a joint venture with larger rival BHP Billiton, and announced plans to raise cash from shareholders.<br /><br />Rio shares closed down 7 per cent in London at 1,884p.