PERTH (miningweekly.com) − Diversified miner Rio Tinto would sell 13 of its noncore assets to streamline its aluminium business, the company announced on Monday.
The miner would transfer six Australian and New Zealand assets into a new business unit, to be called Pacific Aluminium, which would be managed and reported separately from Rio Tinto, prior to disposal.
These assets include the Gove bauxite mine and alumina refinery, the Boyne smelters along with the associated Gladstone power station, as well as the Tomago and Bell Bay smelters.
Rio Tinto also earmarked three speciality aluminium plants and the Gardanne refinery, in France and Germany, as well as the Sebree smelter, in the US, and the Lynemouth smelter and power station, in the UK, for divestment.
The miner said it would continue to manage these seven assets, while it investigated divestment options.
“The assets identified for divestment are sound businesses that are well-managed with productive workforces. But they are no longer aligned with our strategy and we believe they have a bright future under new ownership,” said Rio CEO Tom Albanese.
“The strength of our balance sheet means that we can choose the most opportune method and timing to divest these assets, which may not occur until the economic climate improves. In the meantime, we will continue to run these operations safely and efficiently,” he added.
The divestment of the aluminium assets was expected to allow Rio Alcan to concentrate on its strategy to grow the value of its high quality, tier-one assets and improve the product group’s financial performance.
“Streamlining the product group allows Rio Tinto Alcan to concentrate its efforts even more on driving performance improvements and investing in growth to increase shareholder value,” commented Rio Tinto Alcan CEO Jacynthe Cote.
Rio has begun consultations with affected stakeholders and would engage with the relevant governments and regulators. The relevant Rio Tinto business units will engage with their workforces during the process.
“We see this as a small but anticipated positive for Rio, marking an unsentimental approach to portfolio streamlining and cost reductions,” Liberum Capital commented in a note to clients.
Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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