Rio Tinto to review future of unprofitable Iceland smelter

Rio Tinto said on Wednesday that it will review the future of its unprofitable ISAL aluminium smelter in Iceland, with curtailment and closure among the options.

The miner said the smelter is expected to remain unprofitable in the short to medium term amid "challenging" conditions in the aluminium industry. It pointed to the smelter's uncompetitive energy costs and historically low aluminium prices.

Alf Barrios, chief executive of Rio’s aluminium business, 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."

The strategic review, which consider all options including curtailment and closure, will be completed in the first half.

Production at ISAL has already been reduced to 85% of capacity.

At 0950 GMT, Rio shares were up 1.7% at 4,221p.