Rio Tinto shelves plans to sell BSL, power station
MINING giant Rio Tinto has shelved plans to sell its aluminium business, Pacific Aluminium, including its stakes in Boyne Smelter Limited and the Gladstone Power Station.
The plans were revealed in North America during an investor presentation by aluminium boss Alf Barrios, The Australian reported.
Mr Barrios reportedly indicated Rio Tinto was no longer looking to sell off the Pacific Aluminium business, which has been on and off the market since 2013.
The business includes the two Gladstone projects and aluminium smelters in NSW, Tasmania and New Zealand.
Merrill Lynch analysts who attended the presentation said: "The group will keep and run its 'Pacal' (Pacific Aluminium) assets, which had previously been slated for disposal".
In October last year it was rumoured British billionaire and chairman of GFG Alliance Sanjeev Gupta showed interest in buying the business. Mr Gupta toured the two Gladstone projects.
Earlier in the sale campaign there was also speculation Glencore and Century Aluminium would buy the business.
The news comes amid guidance that the aluminium business will have increased financial pressure due to rising coal prices and material costs.
In Rio Tinto's third quarter report it said higher thermal coal prices were expected to have a US$100 million negative impact in 2018 for the Pacific Aluminium smelters.
The company has also said it expects raw material costs for the aluminium businesses to be US$400 million higher than 2017.
The report also found aluminium production was one per cent lower during the third quarter of 2018 compared to the same period last year, due to disruptions at a Canada smelter. Queensland Alumina Limited increased alumina production to 748,000 tonnes between July and September compared to 720,000 tonnes during the same period last year.
Rio Tinto Yarwun's production decreased from 790,000 tonnes in the third quarter of 2017 to 744,000 tonnes this year. Boyne Island Smelter produced 1000 tonnes more aluminium this year than last year for the third quarter, taking the total to 75,000 tonnes.