19 May 2015

Rio Tinto revives sales plan - report

8:52 am on 19 May 2015

Rio Tinto has reportedly revived plans to sell some of its aluminium assets, including its smelter in Southland.

Tiwai Point smelter

Tiwai Point smelter Photo: Wiki Commons

According to Britain's Financial Times newspaper, Rio has hired Credit Suisse to find a buyer for Pacific Aluminium, majority owner of the Tiwai Point smelter at Bluff and owner of a number of smelters in Australia.

Rio Tinto tried to sell Pacific Aluminium in 2011 but gave up two years later, blaming poor market conditions. Since then, aluminium prices have picked up.

The Financial Times reports Rio remains keen to offload its higher cost smelters and a sales process for Pacific Aluminium is in its infancy.

Rio declined to comment on its plans.

Pacific Aluminium owns 80 percent of the Tiwai Point smelter at Bluff and Japan's Sumitomo Chemical holds the remaining stake.

The future of the plant has been uncertain in recent years.

The smelter received a $30 million subsidy from the Government in 2013 as part of an electricity deal with Meridian that helped ensure the smelter would remain open until at least early 2017.

Last October, Meridian sounded optimistic about the smelter's prospects, saying demand for aluminium was likely to outstrip supply over the next couple of years.