Reuters: Private Equity: UPDATE 1-HIG to buy Rio Tinto's French alumina plants

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UPDATE 1-HIG to buy Rio Tinto's French alumina plants Mar 28th 2012, 11:19 Wed Mar 28, 2012 7:19am EDT * HIG to buy three French alumina plants from Rio Tinto * No financial details given PARIS, March 28 (Reuters) - HIG European Capital Partners has offered to buy three French alumina plants from mining group Rio Tinto , Olivier Boyadjian, managing director of the private equity firm's French unit said on Wednesday. Boyadjian did not provide financial details of the deal. Rio Tinto is selling the three plants - located in Gardanne, La Bathie and Beyrede in southern France - as part of a worldwide plan to scale back its activities in aluminium. The news that HIG was the buyer for the three sites was first reported by French magazine Usine Nouvelle on its website earlier on Wednesday, citing unnamed sources. In October, Rio Tinto unveiled a plan to sell 13 sites across six countries to raise the performance of its aluminium branch. Alumina, extracted from bauxite ore, is an ingredient in making aluminium but can also be used separately as an abrasive, due to its hardness. Rio Tinto declined to comment. Rio Tinto's also operates two aluminium production plants in France, one in Dunkirk on the north coast and one at St Jean de Maurienne in the Alps, the historic heartland of the French aluminium industry. Rio Tinto's aluminium business, Rio Tinto Alcan, told unions this month it was considering a sale of the St Jean de Maurienne plant as it faces a rise in energy costs when a 30-year-old electricity supply agreement with EDF expires in early 2014. The aluminium producer said it was continuing negotiations with EDF over a new contract. Like the steel sector, aluminium production in Europe have been come under threat from cheaper output elsewhere, notably in China, as well as its relatively small margins compared with other metal commodities like iron ore. Link this Share this Digg this Email Reprints

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