Ivanhoe Australia Ltd. (IVA.AU) has hired UBS AG to help find strategic partners for a string of Australian base metals projects as it vies to secure long-term funding to bring them into production.

The move to start a formal sales process comes nearly eight months after Ivanhoe Australia began sounding out potential investors, and is a further sign that interest in industrial metals remains robust despite a shaky global economic outlook.

The process to bring in strategic partners is likely to last two to three months, said Peter Reeve, chief executive of Ivanhoe Australia, which is majority owned by Canada's Ivanhoe Mines Ltd. (IVN).

Detailed discussions have been held with a number of unnamed parties over the past few months, he said in a telephone interview.

"Part of UBS's role in this will be to organize and structure the process, and to bring in others," Reeve said.

Ivanhoe Australia is seeking to sell minority stakes in its Cloncurry projects, moves that would secure funding see them through to production. Potential partners include mining companies and commodity trading houses in Australia and abroad, he said.

The company is set to begin production in March at its Osborne copper and gold project, which it bought from Barrick Gold Corp. (ABX) in 2010. Its Cloncurry portfolio also includes the Merlin molybdenum-rhenium project, Mount Dore cathode copper project and Mount Elliott copper-gold project.

Ivanhoe Australia is 59% owned by Ivanhoe Mines, and its chairman is Ivanhoe Mines founder and CEO Robert Friedland. Anglo-Australian mining titan Rio Tinto PLC (RIO) this month took majority control of Ivanhoe Mines, increasing its stake two percentage points to 51%.

Rio in a filing last week to the U.S. Securities and Exchange Commission said it anticipated replacing some of the management and at least a majority of the non-Rio appointed directors at Ivanhoe Mines, although it doesn't currently have any plans for a shakeup. It also reserved the right to make other changes at the Vancouver-based company.

"For us, it's business as usual," Reeve said, adding Ivanhoe Australia's management was focused on developing its projects.

He said none of the parties the company has held discussions with has proposed a broader deal than a minority interest in a project, but he added there was always the possibility "doing something bigger."

At 0457 GMT, Ivanhoe Australia's shares were trading 2.1% lower at A$1.885, giving it a market value of roughly A$1.06 billion (US$1.13 billion).

-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; robb.stewart@dowjones.com

-David Winning in Sydney contributed to this article.

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