Sources revealed to Reuters late last week that at least three companies, including Glencore plc, have shown a strong interest in purchasing Anglo-Australian mining giant Rio Tinto Group’s aluminium operations in Iceland, Sweden, and the Netherlands for up to US$350 million.
An anonymous source Reuters characterized as being involved in the banking industry reportedly told the news service that Liberty House also showed an interest in Rio Tinto’s aluminium assets, though experts believe the firm may not be in a position to make another purchase so soon after its purchase of 7 plants on the European continent from ArcelorMittal for €740 million (US$835 million). Additionally, Liberty House recently purchased Rio’s aluminium smelters in France and Scotland, which further depleted the firm’s liquidity in recent months.
None of the parties mentioned above chose to go on record regarding the source’s comments.
Rio Tinto has long been shopping its aluminium assets, which it took up with renewed energy late last year after talks with Norsk Hydro fell through. Initially amenable to the deal, Hydro soured on it after approval from the European Commission lagged. Sources say the Commission likely balked at the deal due to concerns regarding the significant market share Hydro would command should the deal have been consummated.
Potential suitor Glencore seems a logical fit for such a deal, as it has no direct ownership of aluminium assets. Though it has a 40-percent stake in Century Aluminum, Glencore’s sole supply of aluminium arises from offtake agreements it has with Century and Russian aluminium titan Rusal. Estimates place the total volume of Glencore’s aluminium purchases to be about 3 million metric tons per annum at present.
Germany’s Trimet Aluminium was also identified by Reuters’ sources as being a potential buyer. However, the firm responded the following day with a denial of being in the market for an aluminium smelter.