Century, Glencore Possible Buyers for Rio Tinto’s Pacific Aluminium Operations

Century, Glencore Possible Buyers for Rio Tinto’s Pacific Aluminium Operations

Century Aluminium and Glencore plc are rumored to be contemplating the purchase of Rio Tinto Group’s aluminium assets in the Pacific. The assets are for sale at present through Deutsche Bank and could be sold for as much as US$1 billion.

So says an article in today’s edition of The Australian, noting that the mining giant has been shopping PacAl off and on since at least 2011, but without yet identifying a suitable buyer. Though Rio apparently held out for more, the current thinking is that the firm may settle for a lesser amount just to offload the package.

Now that aluminium prices are on the rebound, Rio may see the situation as an excellent window for finally making that sale, according to the authors.

Assets allegedly on the table include Tasmania’s Bell Bay Aluminium smelter and Queensland’s Boyne smelter, representing a combined aluminium smelting capacity of 210 thousand metric tons per annum. Also likely included are the Gladstone Power Station, the Tomago Aluminium smelter, and a majority stake in New Zealand Aluminium Smelters, operators of the Tiwai Point aluminium smelter.

Additionally, while Deutsche Bank is presiding over the PacAl offerings, Credit Suisse is arranging for the sale of Queensland’s Hail Creek and Kestrel mines, which have an estimated combined worth of US$2 billion.

According to the article, possible suitors for these coalmines include Apollo Global Management, Whitehaven Coal, and EMR Capital.

Glencore has long been desirous of a union with Rio, as the firm lately partnered with Yancoal to buy Rio’s coal business for US$3.5 billion. Glencore proposed two merger offers to Rio only weeks apart in 2014, but the offers, which would create the world’s single largest mining company, were declined.

Rio first floated the idea of selling off its aluminium assets in 2011, and again announced that the assets were on sale two years later.