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

By Paul Ausick Published Feb 16, 12:30PM EST

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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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About the Author 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.