Rio Tinto, a metals mining and processing concerned headquartered in Australia, has announced plans to streamline its aluminum product group by divesting 13 assets. The decision follows a strategic review the company recently performed.
Rio Tinto has not determined when the assets will be divested, although in a release the company says in the meantime the groups will be managed separately.
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 company’s financial performance.
The assets being spun off include Rio Tinto's interests in six Australian and New Zealand assets, which will transfer into a new business unit, to be called Pacific Aluminium, and be managed and reported separately from the Rio Tinto Alcan product group prior to divestment. These are:
- Australia- Gove bauxite mine and alumina refinery, Boyne Smelters and the associated Gladstone Power Station, the Tomago smelter and the Bell Bay smelter
- New Zealand- New Zealand Aluminium Smelters
A second group of seven non-core assets will continue to be managed by Rio Tinto Alcan while it investigates divestment options. These assets include:
- France and Germany- Three Specialty Alumina plants and the Gardanne refinery
- United States- Sebree smelter
- United Kingdom- Lynemouth smelter and associated power station, for which potential options include closure
Tom Albanese, Rio Tinto’s chief executive, says, “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. 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.”
Jacynthe Cote, Rio Tinto Alcan’s chief executive, says "We are already well on our way to building a truly outstanding aluminum business. 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."
The chief executive of Pacific Aluminium will be Sandeep Biswas. He will report to Rio Tinto business support and operations group executive Bret Clayton.