Aluminum discard
Swiss mining giant Xstrata is mostly picking up other companies, but it has just announced a big discard. It is selling Xstrata Aluminum, which is based on Falconbridge Group's aluminum assets, known as Noranda Aluminum. Xstrata won a major bidding war for Falconbridge in 2006. The buyer of Xstrata Aluminum is private equity group Apollo Management and the price is $1.1
The company's assets are in the form off a smelter and several rolling plants in the US, along with half-ownership of a Jamaican bauxite mine.
Xstrata is holding on to Falconbridge's copper and nickel assets. The aluminum holdings are more valuable now due to increase in prices for the metal.
Keeping track of the rapid changes in who owns what in the mining and metals business. Xstrata has already announced bids for Canadian nickel mining company LionOre and Australia's Gloucester Coal. In 2006, in addition to Falconbridge, Xstrata bought one third of Colombia's Cerrejon coal and s Peruvian copper mine.
A Wall Street Journal article ("Apollo to Pay $1.15 Billion For Xstrata's Aluminum Unit", 4/11/07) quotes an Xstrata executive as saying:
That while Noranda Aluminum is cash generative, its assets "do not provide Xstrata with the necessary scale or upstream exposure to represent a suitable entry point from which to build a world-class aluminum business." In other words, if Xstrata can't be #1 or #2 in the business, it has no long term interest.
6:22:49 PM 
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