Boyne Smelters could be put on the market again: UBS analysis

The largest aluminium smelter in Australia, Boyne Smelters Limited could be put up for sale again by Rio Tinto, according to analysis by UBS. Plans for selling two other Australian smelters are also said to be there on the cards. The move on the part of Rio Tinto could be aimed at selling off "non-core assets" such as aluminium smelters to focus on iron ore business, the analysis observes.

Ever since Rio Tinto chief executive officer Jean-Sebastien Jacques assumed his office on July 3, he has been focused on streamlining Rio's business. "Jean-Sebastien Jacques has delivered about 70 per centof Rio's divestments since 2013 as head of copper and coal, while other divisions have struggled," UBS analyst updated in his report.

"We expect (him) to reinvigorate the clean-up of Rio's portfolio, to shy away from acquisitions and to keep the focus on balancing capital, cost discipline with organic growth."

The analyst predicted sales of $5.2billion for the company in the next three years and held that aluminium smelter operations were ready for sale.

Rio Tinto has been trying to offload the Australasian smelters BSL, Bell Bay Aluminium, Tomago Aluminium and New Zealand Aluminium Smelters Limited since October 2011. Back then they were carved out of Rio Tinto to create Pacific Aluminium.

However, the sale never happened, with Rio announcing in August 2013 that it would not sell Pacific Aluminium because the going rate for the business was not good enough.

At the time former chief executive officer Sam Walsh had said that keeping in view the present (the then) market conditions, running two aluminium businesses within one organisation, was not at all productive.

The present move to sell off assets at Boyne Smelters could be aligned to that divestment strategy, UBS observed.

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