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BHP Scraps Plan for African Aluminum Smelter, May Sell All its Aluminum Assets (BHP, RIO, AA, NHYDY)

The world’s largest mining company, BHP Billiton plc (NYSE: BHP), is cancelling its plans to build a new aluminum smelter in Congo. Not only that, but BHP could be trying to sell its entire aluminum operations as oversupply threatens to…

By Paul Ausick
Published February 16, 2012, 12:30pm ET · 1 min read

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The world’s largest mining company, BHP Billiton plc (NYSE: BHP), is cancelling its plans to build a new aluminum smelter in Congo. Not only that, but BHP could be trying to sell its entire aluminum operations as oversupply threatens to kill pricing.

Rio Tinto plc (NYSE: RIO), Alcoa Inc. (NYSE: AA), and Norway’s Norsk Hydro ASA (OTC: NHYDY) have combined to cut aluminum production by 1.3 million metric tons. Rio Tinto recently wrote down $9 billion on its aluminum operations, and BHP could try to sell off all its aluminum operations which are currently valued at about $2.2 billion.

Of course trying to sell assets at a time when the market is saturated and is on track to remain in that condition for at least a few more years may be a little tricky. BHP can’t let the aluminum operations deteriorate nor can the company afford to spend enough to keep the value up.

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Paul Ausick

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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