Source: Wall street journal

Rio Tinto hopes to sell 13 aluminum businesses, including refineries and smelters in Australia and Europe. Rio is the operator of the Oyu Tolgoi copper and gold project and a 49 percent stakeholder in Ivanhoe Mines, the project's majority interest holder.

Rio said it would streamline its Alcan aluminum division to focus on so called tier one assets following a strategic review of the company's portfolio. Analysts estimate the assets up for sale could be valued are USD 8 billion.

“Streamlining the product group allows Rio Tinto Alcan to concentrate its efforts even more on driving performance improvements and investing in growth to increase shareholder value,” said Jacynthe Cote, chief executive officer of the Alcan unit.

The decision is an about face from its move to buy Canada's Alcan at the top of the market in 2007 for about USD 38 billion. The decision carried debt and forced it to sell businesses and cut costs as the global financial crisis emerged. Rio has since rebounded due to a boom in commodities demand. It was able to buy back its shares and acquired coal producer Riversdale Mining Ltd. for about USD 4 billion. It also plans to partner with Mitsubishi Corp. to buy a majority stake in Coal and Allied Industries Ltd.

Seven assets will remain with the Rio Tinto Alcan unit until they are sold.

The sale could be an opportunity to boost earnings margins for the division. In February Rio said it was reviewing its portfolio for improved financial performance. Strong prices and rising production of iron ore and a recovery in coal output bode well for the firm. The aluminum division posted a profit of USD 379 million in the first half of the year on sales of USD 7.95 billion, benefiting from a  20 percent rise in aluminum price. However, rising production costs have been a burden.