Rio Tinto to sell around $8-bn worth global aluminium assets
17 October 2011
Rio Tinto, the world's second largest mining company, has put 13 aluminum businesses in six countries for sale worth billions of dollars, just four years after it made a highly-leveraged but ill-timed acquisition of Canadian aluminium group Alcan Inc for $38.1 billion in 2007.
The Anglo-Australian miner said that following a strategic review of the company's portfolio, it has decided to streamline its Alcan division to focus on so-called tier one assets, indicating that it would focus and allocate resources to its massive iron ore operations, which currently generate nearly 80 per cent of its earnings.
The London-based miner will transfer its interests in six Australian and New Zealand assets into a new business unit, to be called Pacific Aluminium that will be managed by Pacific Aluminium CEO Sandeep Biswas, reporting independently of the Rio Tinto Alcan product group prior to divestment.
The six Australian assets are Gove bauxite mine and alumina refinery, Boyne smelters and the associated Gladstone Power Station, the Tomago and the Bell Bay smelters, and the Aluminium smelters in New Zealand.
Rio Tinto recently spent nearly $2.3 billion on expansion of the Gove bauxite mine and alumina refinery in Queensland and $1.1 billion on the first phase of a plant in Quebec. Both these assets came with the acquisition of Alcan.
A second group of seven non-core assets will continue to be managed by Rio Tinto Alcan, which include three specialty alumina plants and the Gardanne refinery in France and Germany, the Sebree smelter in the Lynemouth smelter and associated power station in the UK.