Rio Tinto Takes Bold Step into Aluminum Rehab

Reuters reported that Rio Tinto (NYSE:RIO) plans to sell off roughly a third of its business in Aluminum, most of which was acquired in the merger with Canada’s Alcan in July 2007.

As quoted in the market news:

The price of aluminum halved within two years of Rio buying Alcan, and, unlike copper and iron ore, has not fully recovered. Aluminum is not in short supply. Also, producers without good long-term electricity contracts have to deal with a margin squeeze. Power prices are high and, economically, aluminum is more like condensed electricity than refined bauxite. Longer term, the metal’s profit potential is limited by the ability of China, the biggest consumer and producer of aluminum, to use its abundant cheap energy to pursue self-sufficiency.

Click here to read the full Reuters report