It was reported that Rio Tinto’s financial would be impacted by its legacy alumina contracts with amount of US$178 million for the first half of 2018. According to the report, under legacy contracts Rio Tinto supplied around 2.2 million tons of alumina based upon certain ratio of the benchmark aluminum price. Rio Tinto’s aluminum CEO, Alf Barrios, also admitted there will be a negative financial impact at the third quarter this year totaled US$130 million.
Alf Barrios also indicated that around US$100 million negative impact on earnings would be reported whenever there was a 10% increase in alumina index price; however, around US$60 million will be reported whenever there was a 10% decrease in the aluminum LME index.
Most of Rio’s legacy alumina contracts will close from 2023 to 2030 and around 30% of the contracts performance would be reported in 2023. Based upon the source, the aluminum supply chain has been greatly impacted by the US' sanctions, including mills in Russia, Brazil and Australia.
Rio Tinto’s financial performance impacted by legacy alumina contracts
17 Oct 2018 16:01 reported by Chun Chien
- A
- A
- A