Rio Tinto will sell 13 of its aluminium units including refineries and smelters as the world's second biggest miner seeks to streamline its Alcan business.
Shares in Rio Tinto gained 2.7 per cent to a one-month high after the company said in a statement it was streamlining its aluminium group following a strategic review.
The company said the move would allow Rio Tinto Alcan to grow the value of its tier one assets and improve the product group's financial performance, presumable by hocking underperforming assets.
Rio Tinto chief executive Tom Albanese said the assets identified for divestment were sound businesses that were well-managed with productive workforces, but they were no longer aligned with the company's strategy.
"The strength of our balance sheet means that we can choose the most opportune method and timing to divest these assets, which may not occur until the economic climate improves," he said.
"In the meantime, we will continue to run these operations safely and efficiently."
By 1015 AEDT, Rio Tinto stock gained $1.86, or 2.74 per cent, to $70.16, the highest since September 16.
Mr Albanese said the move was another step towards achieving performance targets in the Aluminium product group.
"We have already made good progress, with plans in place to generate sustainable performance improvement, and we are investing at a number of our core assets."
Rio Tinto's interests in six Australian and New Zealand assets will transfer into a new business unit, to be called Pacific Aluminium, and a second group of seven non-core assets will continue to be managed by Rio Tinto Alcan while it investigates divestment options.
Rio Tinto Alcan chief executive Jacynthe Cote said Rio Tinto had begun consultations with affected stakeholders and would engage with governments, regulators and workers.
The chief executive of Pacific Aluminium will be Sandeep Biswas.
He will report to Rio Tinto business support and operations group executive Bret Clayton.
Rio's production result for the September quarter last week revealed Bauxite production was up seven per cent on the prior corresponding period, with aluminium up two per cent but alumina down five per cent.
Price movements boosted earnings in aluminium for the year to June 30.
