(RTTNews) – Anglo-Australian mining giant Rio Tinto Plc (RTNTF, RIO, RIO.L, RTPPF) announced Wednesday that it will conduct a strategic review of its unit ISAL smelter in Iceland.
With the review, the company aims to determine the operation’s ongoing viability and explore options to improve its competitive position.
The strategic review will consider all options including curtailment and closure, and will be complete in the first half of 2020.
Rio Tinto expects ISAL to remain unprofitable in the short to medium term due to the smelter’s uncompetitive energy costs and historically low aluminium prices.
Production at ISAL, which employes around 500 people, has already been reduced to 85 percent of the smelter’s capacity due to its lack of profitability.
The company said it will continue discussions with the Government of Iceland and power provider Landsvirkjun on how the smelter can return to profitability and become competitive in the global market.
Rio Tinto Aluminium chief executive Alf Barrios said “We have worked intensively to improve ISAL’s performance, however it is currently unprofitable and cannot compete in the challenging market conditions due to its high power costs. Rio Tinto will review options for the smelter, with the aim of finding a solution for ISAL to become an economically viable business.”
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