As prices continue to drop Rio Tinto, the mining giant, has stated that it will have to give up attempts to sell off its aluminium business and must instead report an 18% drop in their profits at the half-year mark. Rio stated that it had been unable to find a buyer and that the current business environment has made it impossible to consider selling Pacific Aluminium right now. As the economic growth rate continues to slow down many commodity prices have dropped lower and lower which is a turnaround from the record highs that they were reaching previously.
According to Rio Tinto, the fall in prices of coal, copper, and iron ore all helped lead to the fall in overall profits of the business. Pacific Aluminium has five aluminium smelters at the moment, an alumina refinery located in New Zealand, and a bauxite mine that is located in Australia. Rio Tinto first put it up for sale back in 2011 when things still looked a bit more promising for the company.
Sam Walsh, the chief executive of the miner company, stated that after conducting a very comprehensive review they have decided that due to the drop in value of Pacific Aluminium now is now that best time to sell the company for any real value and therefore they are going to reintegrate its operations back into Rio Tinto.
The profits of the company were only £2.73bn over the last six months leading up to June. According to the company out of this profit about £1.5bm came from cost cuts and the fact that they were forced to fire about 2,200 workers over the same six month period. Walsh stated that the future of the company is uncertain right now and they will have to wait to see what happens over the next six months.