Rio Tinto is re-examining its aluminium divestment strategy,
as the market starts to gather strength.
This is not the first time the miner has attempted to sell
off its aluminium division, first putting it on the market in 2011 amid a
global aluminium slowdown.
It managed to offload its
stakes in some aluminium operations, offloading its holdings in Constellium NV for about $330 million,
It tried to sell Pacific Aluminium and other assets in a bid to decrease net debt of $22 billion and
maintain its single-A credit rating.
However this failed, with Rio Tinto CEO Sam Walsh stating at
the time that it could not manage a “value-drive sale” of its aluminium
“The market was
aware PacAl wasn’t going to sell,” Walsh said.
“I am a realist.
Let’s get on with life. Running two aluminium businesses within one
organisation…that’s not all that productive.”
He said the company
would not sell assets at any price simply to “tick boxes”.
“I think the market was aware
that Pacific Aluminium was not going to sell,” Walsh said.
The miner has approached Credit Suisse to act as an agent
for its assets, which include smetlers at
Bell Bay in Tasmania, Tiwai Piont in New Zealand, Gove in the Northern
Territory, Tomago near in Newcastle, and both Boyne and Yarwun near Gladstone.
It also has alumina and bauxite mines at Gove and Weipa.
According to sources close to the situation, development in
the previously strained alumina market has garnered a renewed interest in the
sale, the Australian Financial Review reports.
Analyst reports now have the once struggling division forecast
to generating revenues of more than US$ 3 billion this year, much of which has
been supported by Rio’s stringent cost cutting measures.
Rio Tinto has declined to comment on the market rumours.