Rio Tinto stops sale of aluminium business as prices fall
- 8 August 2013
- From the section Business
Mining giant Rio Tinto says it has given up trying to sell its aluminium business and has reported an 18% fall in underlying half-year profits.
Rio said it had not found a buyer and it was "not possible" to sell Pacific Aluminium in the current environment.
Many commodity prices are well below the record highs of recent years as China's economic growth rate slows.
Rio said lower iron ore, copper and coal prices all contributed to the fall in profits.
Pacific Aluminium, which has five aluminium smelters, a bauxite mine and an alumina refinery in Australia and New Zealand, was put up for sale in 2011.
The miner's chief executive, Sam Walsh, said in the company's statement: "Following a comprehensive review, we have also determined that the divestment of Pacific Aluminium for value is not possible in the current environment and it will be reintegrated into the Rio Tinto Alcan group."
Underlying profits were $4.23bn (£2.73bn) in the six months to June.
The company said it had managed to make $1.5bn in cost cuts and had shed 2,200 workers in the period.
Mr Walsh said the future picture was uncertain: "The medium-term economic outlook remains volatile with a broader range of outcomes now possible.
"Chinese economic growth has decelerated so far this year and is unlikely to recover significantly in the second half, but we do not expect a hard landing."