Reuters reported that Rio Tinto is pushing ahead with plans to sell a century old aluminium plant in the Alps of southeast France as the global mining group continues its retreat from a struggling aluminium sector.
The group's Rio Tinto Alcan division that operates the Saint Jean de Maurienne plant said that the upcoming renewal of 30 year old electricity supply contract with EDF swung the balance in favor of selling a site that was among its less profitable.
The plant, which went into production in 1907 in the early years of the aluminium industry had 431 workers at the end of last year making it in the leading employer in the local area.
A spokeswoman for Rio Tinto Alcan said that "We're focusing our efforts on the sale process, which is progressing well. We have received expressions of interest. The group expects to end in a week or two" a first stage of preliminary offers before entering talks with interested parties about possible firm bids for the site.”
A sale could avoid the plant becoming the latest in a series of industrial sites in France to announce closures or mass layoffs, a blow to Socialist President Mr Francois Hollande as he tries to allay fears over surging unemployment.
Rio Tinto already sold 3 plants in France this year that produce alumina, an ingredient in aluminium also used separately as an abrasive as part of an estimated USD 8 billion of aluminium assets put up for sale last year. It also said earlier this year it was considering a sale of the Saint Jean de Maurienne plant. Rio Tinto wants to focus on its more profitable iron ore activities and its retreat from aluminium has been encouraged by sluggish prices and a weak European market hit by overcapacity.
The spokeswoman said that Rio Tinto Alcan is continuing talks with EDF about a new electricity deal that would let it continue operating the plant but the sale of the site is the priority. But the head of EDF said the aluminium maker had no willingness to reach a deal and had already decided to sell.
Mr Henri Proglio CEO of EDF said that "The fate (of the site) has already been sealed, the matter is closed. Rio Tinto has already decided to stop.”
The source said that we are planning to sell it in 2013 and it is on top of our divestment pile. We don't see value in that smelter, it is not part of our strategy so we had been planning to shut it down or sell it for a while.
The Rio Tinto spokeswoman said that no decision had been taken yet whether to go ahead or not with a sale and that a closure would only be envisaged if the sale process failed.
Source - Reuters
(www.steelguru.com)
