Rio Tinto is considering spinning off some of its Australian aluminum assets as a planned carbon emissions tax would rely raise costs and lower profit margins, the Australian Financial Review reported Monday.

The newspaper said Rio Tinto had been working with PricewaterhouseCoopers and Macquarie Group over the past six months working on a strategy on how best to spin off its aluminum assets.

Last week, the London-based mining firm told investors some assets in its aluminum portfolio were not aligned with its corporate global improvement and expansion strategy.

"These are assets that we would consider divesting. Of course, we would want to achieve good value if we decided to sell them. Through the divestment of non-core assets, together with aggressive targets for cost reduction and production creep, plus targeted investment in growth, we are confident that the aluminum business will achieve a 40 percent EBITDA margin," CFO Guy Elliott told investors.

The company's Australian aluminum business consists of three refineries, three smelters and two bauxite mines, the Australian Financial Review said. Among the three, it would be the mines that Rio Tinto will definitely maintain as they provide the highest income in the group. Its major consumer, China, is a short of bauxite