Rio’s Pacific Aluminium May Fetch $2 Billion, Macquarie Says

Published: Aug 15, 2017 13:54

Save

At current spot prices, the smelters generate strong cash flow.

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

aluminum price Rio Tinto

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

2 hours ago

Domestic Secondary Aluminum Alloy Ingot Inventory Down by 364 mt, Foshan Sees Major Destocking

[SMM News Flash] Inventory of secondary aluminum alloy ingots in major domestic consumption areas decreased by 364 mt MoM from the previous day, with destocking mainly concentrated in the Foshan area.

2 hours ago

New Locomotives Boost Guinea's TransGuinean Rail for Iron Ore, Bauxite Transport

[SMM Aluminum Express News] Four new locomotives, Foussein, Lanny-Ninkin, Kaporo, and Gbereakhory have entered service on Guinea's TransGuinean corridor rail line, managed by La Compagnie du TransGuinéen (CTG). Primarily built to haul high-grade iron ore from Simandou mine to Morebaya port (650 km), these Wabtec units (part of a 78-locomotive fleet) support heavy loads for faster, reliable shipments. The corridor's high-capacity infrastructure (12 stations, 206 bridges, rugged terrain adaptations) also enables transport of bauxite and other minerals, creating a multi-commodity logistics backbone that could shorten transit for landlocked neighbors (e.g., Mali) and boost regional mineral exports.

2 hours ago

Aluminum Scrap Prices Follow Upward Trend but with Regional Divergence Market Supply Increases [SMM Cast Aluminum Alloy Morning Comment]

[smm cast aluminum alloy morning comment: aluminum scrap prices rise but with regional divergence market supply increases] overnight, the 2604 contract for aluminum alloy opened higher and retreated after a rapid rise. it touched a high of 23,305 yuan/mt at the opening and then fluctuated downward, reaching a low of 22,940 yuan/mt, before rebounding slightly towards the close. it finally closed at 230,450 yuan/mt, down 135 yuan/mt from the previous close, a decline of 0.58%. the futures showed a move downwards after a higher opening, indicating a weakening of short-term bullish momentum. trading volume remained low, and open interest decreased slightly, suggesting a cautious approach to trading.

2 hours ago