Rio Tinto says sale of Iron Ore Company of Canada not a necessity

* Bids for IOC last year were far below Rio Tinto (Xetra: 855018 - news) 's target

* Rio says IOC pellet will gain value as China toughens environmental standard

LONDON, Feb 13 (Reuters) - Rio Tinto , the world's third largest miner, said on Thursday that the sale of its stake in Iron Ore Company of Canada (IOC), which it put up for sale last year, was not essential.

"We do want to continue to rationalise (our portfolio) but this is absolutely about value, we are not about to do something silly to tick a box," Chief Executive Sam Walsh said.

"For IOC, if somebody wants to offer a big cheque that's fine but we don't need to sell any major business."

IOC is currently 59 percent owned by Rio Tinto, 26 percent by Mitsubishi Corporation (LSE: MBC.L - news) and 15 percent by Labrador Iron Ore Royalty Company.

Rio Tinto put its stake up for sale about a year ago but offers from companies including private equity investor Apollo, rival Blackstone (NYSE: BX - news) and commodity trader and miner Glencore Xstrata came in well below the mining group's target of about $3.5 to $4 billion, sources familiar with talks said in August last year.

Walsh said IOC is going to become a more valuable business going forward also because of stricter environmental standards in China forcing mills to rely on higher quality raw materials such as the iron ore pellet IOC produces.

Chinese steelmakers and power plants are being forced to shop around for higher-quality raw materials to meet tougher air pollution standards.