Rio Tinto may spin off non-core assets: analysts

Market analysts predict global heavyweight Rio Tinto will spin off non-core assets after the miner's incoming chief announced significant management restructure to drive renewed performance.

Rio is restructuring operations, with a new energy and minerals unit consisting of coal, uranium, borates, salt and titanium-dioxide assets.

"It looks like $9 billion worth of non-core assets could be spun off into a separate listing, similar to what BHP has done with South32," IG market analyst Angus Nicholson wrote in a note to clients on Wednesday.

In late May 2015, the world's largest diversified miner BHP Billiton spun off its manganese, nickel, alumina, and coal assets it no longer needed to its investors as South32.

"(It's) speculation at this stage, (but) it's got people starting to think about possibilities," CMC Markets chief market analyst Ric Spooner told Xinhua.

Rio's shares had surged 61 Australian cents, or 1.38 percent to 44.82 Australian dollars in early trade on Wednesday, but eventually softened to close 37 cents, or 0.84 percent higher at 44.58 Australian dollars in a flat market.

The potential spin-off will be run by Alan Davies who leaves his post from the diamond and mineral side of the business.

"The Group's world-class assets will be firmly at the centre of the business and will be supported by efficient and agile global functions," Rio said in a statement.

Not all analysts are certain of a possible spin-off, however, despite higher quality assets being held in other divisions.

"There will definitely be assets in the Energy and Minerals division that are not as core," RBC Capital Markets analyst Tyler Broda said, adding there may be "benefits from maintaining some of these other potentially counter-cyclical commodities like uranium" to offset reliance on iron ore for earnings. Endit