|Rio Tinto sells aluminum assets to reshape business
Rio Tinto will sell its Scottish aluminum assets, the global miner said Thursday, as it works to reshape its business and cut debt to help combat a downturn in commodity prices.
The Anglo-Australian giant said it will sell its 100 percent shareholding in Alcan Aluminium UK for $410 million to global commodity group SIMEC.
Alcan operates a smelter and hydroelectric facilities, which power the smelting plant, at Kinlochleven and Lochaber.
"This is a value-creating sale for Rio Tinto and represents another example of refining our portfolio to focus on our suite of tier one assets," said Rio's aluminum chief executive Alf Barrios.
"There was significant interest in the assets, but SIMEC is committed to continuing operations at the smelter and working with the community on further economic development."
Rio has agreed to more than $1.3 billion in divestments this year, with the total value of assets sold since early 2013 amounting to $5.3 billion.
The miner, which reported a 47 percent slump in first-half underlying earnings, has been struggling with volatile commodity prices that have forced it to sell assets, rein in spending and cut dividends.
It announced separately Thursday plans to generate $5 billion of additional free cash flow over the next five years by raising productivity.
"We are well on track to meet our target of $2 billion of cash cost savings by the end of next year," said Rio CEO Jean-Sebastien Jacques.
"We are also taking advantage of any opportunity to generate value from mine through to market," he said.