Boyne Smelters could be sold in $5.2b sale prediction: 'I'm a realist'

BOYNE Smelters Limited could be put on the market again by Rio Tinto along with two other Australian smelters, according to analysis by UBS.

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The concept behind the sales would be to sell off "non-core assets" such as aluminium smelters to focus on the tier-one businesses of iron ore.

Rio Tinto chief executive officer Jean-Sebastien Jacques took the top job on July 3 and was known for streamlining the business when he was head of the copper and coal division.


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Aerials of Boyne Smelter Limited (BSL) from early 2013. Photo Contributed
Aerials of Boyne Smelter Limited (BSL) from early 2013. Photo Contributed Contributed

"Jean-Sebastien Jacques has delievered about 70% of Rio's divestments since 2013 as head of copper and coal, while other divisions have struggled," UBS analyst Myles Allsop told The Australian.

"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 tipped sales of $5.2billion in the next three years and highlighted aluminium smelters as ready to be sold.

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.

Then chief executive officer Tom Albanese said "(the businesses) are no longer aligned with our strategy and we believe they have a bright future under new ownership".

But 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 said the market was aware Pacific Aluminium was not going to be sold.

"I'm a realist. I'm a pragmatist. Let's get on with life. Running two aluminium businesses within one organisation, that's not all productive," he said.

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The sale of Pacific Aluminium could fetch as much as $2.6billion to add to the $6.2billion made from sales of businesses in recent years.

But it's unknown if Rio would be able to get enough demand for the sale of the four smelters following its failed attempt in 2011.

A spokesperson for Rio Tinto declined to comment on market speculation.

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