Wires

Rio Tinto seeks bids for French aluminium plant

* Rio Tinto unit selling one of two French plants

* Says sale triggered by expiry of power supply deal

* Rio Tinto retreats from weak aluminium sector

* Industry ministry to meet unions next Tuesday

By Gus Trompiz

PARIS, Oct 10 (Reuters) - Rio Tinto is pushing aheadwith plans to sell a century-old aluminium plant in the Alps ofsoutheast France as the global mining group continues itsretreat from a struggling aluminium sector.

The group's Rio Tinto Alcan division that operates theSaint-Jean-de-Maurienne plant told Reuters the upcoming renewalof a 30-year-old electricity supply contract with EDFswung the balance in favour of selling a site that was among itsless profitable.

The plant, which went into production in 1907 in the earlyyears of the aluminium industry, had 431 workers at the end oflast year, making it in the leading employer in the local area.

"We're focusing our efforts on the sale process, which isprogressing well," a spokeswoman for Rio Tinto Alcan said onWednesday. "We have received expressions of interest."

The group expects to end "in a week or two" a first stage ofpreliminary offers before entering talks with interested partiesabout possible firm bids for the site, she said.

A sale could avoid the plant becoming the latest in a seriesof industrial sites in France to announce closures or masslayoffs, a blow to Socialist President Francois Hollande as hetries to alay fears over surging unemployment.

Rio Tinto already sold three plants in France this year thatproduce alumina, an ingredient in aluminium also used separatelyas an abrasive, as part of an estimated $8 billion of aluminiumassets put up for sale last year.

It also said earlier this year it was considering a sale ofthe Saint-Jean-de-Maurienne plant.

Rio Tinto wants to focus on its more profitable iron oreactivities and its retreat from aluminium has been encouraged bysluggish prices and a weak European market hit by overcapacity.

Rio Tinto Alcan is continuing talks with EDF about a newelectricity deal that would let it continue operating the plant,

but the sale of the site "is the priority", the spokeswomansaid.

But the head of EDF said the aluminium maker had nowillingness to reach a deal and had already decided to sell.

"The fate (of the site) has already been sealed, the matteris closed. Rio Tinto has already decided to stop," EDF's ChiefExecutive Henri Proglio said on Wednesday during a debate onenergy organised by French parliamentarians.

His comments supported those of a source at Rio Tinto.

"We are planning to sell it in 2013 and it is on top of ourdivestment pile," the source said. "We don't see value in thatsmelter, it is not part of our strategy so we had been planningto shut it down or sell it for a while."

The Rio Tinto spokeswoman said no decision had been takenyet whether to go ahead or not with a sale, and that a closurewould only be envisaged if the sale process failed.

The French government has been acting as a facilitator inthe talks between Rio Tinto Alcan and EDF, and the industryministry is to host a delegation of union and public officialsnext Tuesday. The ministry declined to comment on the situation.

Saint-Jean-de-Maurienne is the smaller of Rio Tinto Alcan'stwo primary aluminium plants in France, with its capacity of135,000 tonnes only half that at Dunkirk on the north coast.

Rio Tinto Alcan is the descendant of former French aluminiummaker Pechiney bought a decade ago by Canada's Alcan which waslater absorbed by Rio Tinto.

(Additional reporting by Nick Vinocur and Benjamin Mallet inParis, Catherine Lagrange in Lyon and Silvia Antonioli inLondon; Editing by Muriel Boselli and William Hardy)

((gus.trompiz@thomsonreuters.com)(+33 1 49 49 52 18)(ReutersMessaging: gus.trompiz.thomsonreuters.com@reuters.net))

Keywords: FRANCE ALUMINIUM/RIO