Rio Tinto may sell Australasian aluminium assets for $1bn

17 May 2015 (Last Updated May 17th, 2015 18:30)

Rio Tinto reportedly plans to sell some of its Australasian aluminium assets in a deal worth around $1bn.

Rio Tinto reportedly plans to sell some of its Australasian aluminium assets in a deal worth around $1bn.

The Financial Times reported that the latest move by the global mining giant comes as it is in the process of reviving a sale plan for its Pacific Aluminium (PacAl) unit.

Rio Tinto has appointed Swiss financial services company Credit Suisse to find a buyer for its business, the newspaper said.

"Rio Tinto has reportedly appointed Swiss financial services company Credit Suisse to find a buyer for its business."

In 2011, the company announced it could split off the unit, and again announced plans to sell it in 2013 citing weaker market conditions.

In the aluminium segment, the company has been recovering from acquisition setback of the Canadian aluminium group, Alcan in 2007, in a deal worth $38bn.

After the acquisition, Rio Tinto, which gains most of its income from its iron ore division, ramped up its aluminium business.

The sale plan follows a trend by mining majors looking to divest non-core assets.

According to Financial Review, in 2013, PacAl earnings before interest, tax, depreciation and amortisation increased from $252m to $524m in 2014.

PacAl assets include smelter operations in Australia and New Zealand.

The operations are Bell Bay Aluminium, Boyne Smelters in Queensland, Gladstone Power Station in Queensland, Tomago Aluminium in New South Wales and New Zealand Aluminium Smelters.