- Write by:
-
Friday, October 12, 2018 - 1:58:21 PM
-
1041 Visit
-
Print
Mining News Pro - Diversified miner Rio Tinto has warned of a $178-million impact on its financials during the first half of 2018, due to its legacy alumina contracts.
According to Mining News Pro -The miner supplies some 2.2-million tonnes of alumina under legacy contracts, which are priced at a percentage of the benchmark aluminium price.
During the first half of 2018, prices on the London Metal Exchange (LME) averaged $2 209/t, and $450/t for alumina.
Rio’s aluminium CEO Alf Barrios said in London this week that a further $130-million negative impact would be recorded in the third quarter of 2018.
He explained that a near $100-million negative impact on earnings before interest, taxes, depreciation and amortisation would be reported for every 10% increase in the alumina index price, and a near $60-million negative impact for every 10% decrease in the aluminium LME index.
The opposite impact would apply if the index pricing moved in the other direction, Barrios said.
The bulk of Rio’s legacy alumina contracts will end between 2023 and 2030, with some 30% of the contracts to be rolled off post 2023.
The aluminium supply chain has been hit by US sanctions on Russian producer Rusal, reduced capacity at Norsk Hydro’s alumina plant in Brazil and a strike at Alcoa’s refineries in Australia.
Since the start of the year, benchmark aluminium prices on the LME have risen 21%.
Rio Tinto is selling some of its aluminium assets and has its Iceland operations on the market. Last month, Norsk Hydro dropped a $345-million offer for the Iceland assets, which includes the ISAL plant, as well as shares in an anode plant in the Netherlands, and a fluoride plant in Sweden.
Newswire Reuters reported this week that Rio Tinto was close to restarting the sale process.
Short Link:
https://www.miningnews.ir/En/News/279307
A Russian arbitration court ruled on Monday that four units of Swiss commodities trader Glencore will pay more than 11.4 ...
The four largest indigenous communities in Chile’s Atacama salt flat suspended dialogue with state-run copper giant ...
A prefeasibility study for Predictive Discovery’s (ASX: PDI) Bankan gold project in Guinea gives it a net present value ...
Chile’s state-run miner Codelco plans to select a partner for a future lithium project in one of the country’s top salt ...
A Native American group has asked all members of a US appeals court on Monday to overturn an earlier ruling that granted ...
Codelco is exploring more partnerships with the private sector as Chile’s state copper behemoth looks to recover from a ...
Representatives from the Peñas Negras Indigenous community, in northwestern Argentina, clashed with heavily armed police ...
The London Metal Exchange (LME) on Saturday banned from its system Russian metal produced on or after April 13 to comply ...
China’s state planner on Friday finalized a rule to set up a domestic coal production reserve system by 2027, aimed at ...
No comments have been posted yet ...