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Anglo-Swiss mining group Xstrata has announced the sale of its aluminium business to a private equity group for $1.15 billion (£580.8 million).

Xstrata said the cash deal with New York-based Apollo Management would be subject to regulatory approval, with the takeover expected to be completed by the second quarter of 2007.

In a statement, the mining group confirmed it had decided to part with its aluminium operations following a "comprehensive strategic review" instigated following its own acquisition of the Canadian mining firm Falconbridge last year.

Xstrata Aluminum, which was created from the aluminium assets gained from Falconbridge, has assets in both the US and Jamaica, including the full ownership of a primary smelter in New Madrid, Tennessee and a 50 per cent interest in Louisiana's Gramercy aluminium refinery and in Jamaica's St Ann bauxite mine.

However, after reviewing the prospects of its operations, Xstrata concluded that they did not provide a suitable platform from which to develop a substantial aluminium business from as part of its wider activities.

"Noranda Aluminum is a highly cash generative and robust business with an excellent suite of assets," said Xstrata chief executive Mick Davis.

"However, our review concluded that these assets do not provide Xstrata with the necessary scale or upstream exposure to represent a suitable entry point from which to build a world-class aluminium business."

"As a result, these assets fit more naturally with alternative owners who are incentivised to optimise the business as a standalone unit, than as part of Xstrata's portfolio," he added.

News of the sale comes just a day after Xstrata announced that it had agreed to buy the Australian mining group Gloucester Coal for a price of around about A$319.2 million (£133 million).