- Rio Tinto (RIO +0.8%) appears to be placing ~$9B of unwanted assets from coal and uranium to Canadian iron ore into a single basket ready to spin off, Bernstein analyst Paul Gait says.
- Rio's shakeup into four product groups includes a new Energy and Minerals segment that features coal and uranium mines, salt, borates and titanium dioxide businesses, and Rio’s Iron Ore Co. of Canada unit, which Gait says "seems like a portfolio of unwanted assets that could be ready for a spinoff [and] looks a lot like the South32 assets previously in BHP’s portfolio."
- RBC analyst Tyler Broda agrees that Rio will hold higher quality assets in some of its other divisions but is cautious on a possible spinoff, noting Rio’s reliance on iron ore for earnings and that, there may be “benefits from maintaining some of these other potentially counter-cyclical commodities like uranium.”