Mining giant Rio Tinto is streamlining its aluminum product group, estimated by Reuters at a value of $8 billion, for future divestment, the company announced in a statement.

Following a strategic review, Rio Tinto said 13 assets will be divested at an appropriate point in the future, and some of these will be managed separately in the meantime.

It said 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.

"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," Rio Tinto chief executive Tom Albanese said.

"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," Albanese added.

NZ Assets

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 Gove bauxite mine and alumina refinery, Boyne Smelters and the associated Gladstone Power Station, the Tomago smelter and the Bell Bay smelter in Australia and the 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 Three Specialty Alumina plants and the Gardanne refinery (France and Germany); Sebree smelter (United States) and Lynemouth smelter and associated power station (United Kingdom).

Rio Tinto Alcan chief executive Jacynthe Cote said the company is 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," Cote said.

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.

Rio Tinto has appointed Sandeep Biswas as the chief executive of Pacific Aluminium. Biswas will report to Rio Tinto business support & operations group executive Bret Clayton.