Sebree buyer speculation mounts

Oct 18, 2011 | 06:04 PM | Suzy Waite

Tags  Rio Tinto Alcan, Noranda, Century, Ormet, Glencore, sale, Brett Levy, Sebree Suzy Waite

NEW YORK — A number of second-tier aluminum producers are said to be circling as Rio Tinto Alcan gears up to put its Sebree, Ky., smelter on the auction block as part of a larger 13-facility divestment plan.

Rio Tinto announced Monday that it was looking to sell mines, smelters, alumina refineries and power stations in the United States, Europe, Australia and New Zealand to cut costs and improve its financial performance (AMM, Oct. 18).

Although no public bids have yet to materialize for the assets, analysts in the sector speculate that a mid-sized producer—such as Noranda Aluminum Holding Corp., Century Aluminum Co. or Ormet Corp.—would be the most likely bidder for Rio Tinto’s Sebree smelter. Global trading firm Glencore International Inc. also is a possibility, as would be a private equity firm, sources said.

Spokesmen for Noranda, Century and Glencore declined to comment, while Ormet did not return calls for comment.

Noranda would be a natural frontrunner for Rio Tinto’s Sebree smelter since it has excess supply of bauxite and alumina, according to aluminum market analysts.

"Currently, Noranda produces about twice as much bauxite and alumina as it uses to make primary aluminum in New Madrid, Mo. They would balance their portfolio by adding more primary aluminum production," Brett Levy, metals and mining analyst at Jefferies & Co., told AMM. ....