NEWS RELEASE · 20th October 2011
Rio Tinto is streamlining its Aluminium product group following a strategic review. Thirteen assets will be divested at an appropriate point in the future, and some of these will be managed separately in the meantime. 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.
Rio Tinto's interests in six Australian and New Zealand assets 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 further 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
Rio Tinto chief executive Tom Albanese said "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.
"This move is a further significant step towards achieving our performance targets in the Aluminium product group. We have already made good progress, with plans in place to generate sustainable performance improvement, and we are investing at a number of our core assets."
Rio Tinto Alcan chief executive Jacynthe Cote said "We are already well on our way to building a truly outstanding aluminium 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."
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.