2017-08-14 23:42:42.303 GMT
By David Stringer
(Bloomberg) -- Unit doesn’t fit Rio Tinto Group’s criteria for world class assets; co. been seeking to sell the ops. since 2011, Macquarie analysts write in note dated August 14.
* At current spot prices, the smelters generate strong cash flow, though subject to “rising wholesale power prices, a largely unionized labor force, and uncertainty over reliable power supply”
* Smelters avg. break-even cost ~$1,630/ton in FY17, Macquarie est.
* Media reports cite potential sale price $1b, in line with June 30 NOA value; Macquarie sees significant upside to price forecasts should sentiment improve
* Co. spokesman declined to comment