News: RIO UPDATE 1-Rio Tinto in talks with Inalum, Freeport for Grasberg stake sale

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May 23 (Reuters) - Global miner Rio Tinto Ltd (RIO) on Wednesday confirmed it was in discussions with Inalum and Freeport-McMoRan FCX.N regarding Inalum's potential purchase of Rio's stake in the Grasberg mine, including the price of the deal.

No agreement has been reached and there is no certainty that binding agreements would be signed, Rio said in a statement noting reports of the potential purchase by Indonesia's state mining holding company Inalum of Rio's interest in Grasberg for $3.5 billion.

In early May, Inalum said Freeport's divestment of a controlling interest in Grasberg, the world's second-biggest copper mine, was still planned for 2018, even though the price and some contract terms were still to be agreed.

Inalum, which is arranging funding for the deal, said it already had a "committed" loan for the transaction with Freeport and Rio for the majority stake in Grasberg.

Indonesian President Joko Widodo had instructed his administration to complete negotiations to buy a majority stake in Grasberg, which includes buying Rio Tinto's participating interest, by end-April, but Freeport said new environmental demands from the government on managing mine waste could ultimately throw the timing of divestment into question.