Rio Tinto to can 13 aluminium assets

17th Oct 2011 07:37

It may be Autumn but mining colossus Rio Tinto is performing a touch of Spring cleaning, with a reorganisation of its Aluminium product group that will include the sale of 13 assets at some point in the future.After performing a strategic review, Rio Tinto has decided to put its interests in six Australian and New Zealand assets into a new business unit, to be called Pacific Aluminium, that will be managed and reported separately from the Rio Tinto Alcan product group prior to divestment. The assets are: Gove bauxite mine and alumina refinery, Boyne Smelters and the associated Gladstone Power Station, the Tomago smelter and the Bell Bay smelter in Australia, plus the New Zealand Aluminium Smelters in New Zealand. A second group of seven non-core assets will continue to be managed by Rio Tinto Alcan, pending their potential sale.These assets include three speciality alumina plants and the Gardanne refinery in France and Germany, the Sebree smelter in the US and the Lynemouth smelter and associated power station in the UK. Rio Tinto said that one of the potential options for Lynemouth included closure.As might be expected of a seller looking to get shot of some assets, Rio's chief executive Tom Albanese maintained that there is nothing wrong with the businesses, and that the strength of Rio's balance sheet mean it is under no pressure to get shot of the assets at a knock-down price.The assets are on the auction block because "they are no longer aligned with our strategy," according to Albanese. The move will allow Rio Tinto 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, the group statement said.Rio Tinto has begun consultations with affected stakeholders and will engage with the relevant governments and regulators. The relevant Rio Tinto business units will engage with their workforces during the process.The chief executive of Pacific Aluminium will be Sandeep Biswas. He will report to Rio Tinto business support & operations group executive Bret Clayton. --jh