(In April 3 story, corrects share price in paragraph five to

5,078 pence from 5,078 pounds and adds dropped words "iron ore"

in last paragraph)

April 3 (Reuters) - The ethics adviser to Norway's $1.6

trillion sovereign-wealth fund is assessing whether to recommend

the investor to divest its multi-billion dollar stake in mining

giant Rio Tinto for environmental concerns, the Wall

Street Journal reported on Wednesday, citing people familiar

with the matter.

The council on ethics has told Rio Tinto in recent months

that it is assessing the company for environmental damage from

its operations in the Brazilian Amazon, the report said, citing

a letter seen by WSJ.

The world's largest sovereign wealth fund, which owns 1.5%

of the global listed shares across 8,800 companies looks into

investments made by Norges Bank Investment Management, the

operator of the fund.

Norges is one of Rio's largest stakeholders and as at Dec.31

owned a 2.24% stake worth $2.7 billion in the global miner.

London-listed shares of Rio fell 0.8% to 5,078 pence.

The council's concerns around Rio have generally been

focussed on deforestation and the miner's partial ownership of

an operation in Northern Brazil called Mineração Rio do Norte,

or MRN, in which Rio owns 22%, the report added.

"While the MRN operation is not managed by Rio Tinto, it has

been working to progressively improve its environmental and

social performance to meet industry best practice and our

expectations as a shareholder," a spokesperson for the world's

largest iron ore miner told Reuters.