The industrial arm of Sanjeev Gupta’s GFG Alliance, Liberty House has made a binding offer to acquire Rio Tinto’s aluminum smelter in Dunkirk, northern France, for $500m subject to final adjustments.

Rio Tinto’s smelter in Dunkirk is claimed to be the largest aluminium producer in Europe.

In relation to the bid, Rio Tinto will launch a consultation process, in accordance with French law, with employees, relevant European works councils, and other stakeholders.

The sale of Rio Tinto’s aluminium smelter is subject to satisfactory completion of these consultations, and expected to be completed in the second quarter of this year.

The new proposal also includes plans for the modernisation of the site.

In December 2016, Liberty House had acquired Rio Tinto’s Lochaber Smelter and assets in Scotland.

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Rio Tinto Aluminium chief executive Alf Barrios said “The binding offer for the sale of Aluminium Dunkerque represents the best option for the future development of the site, while also delivering value for Rio Tinto as we continue to streamline our portfolio.

“Liberty House has a track record of investing in similar assets, which should secure a long-term sustainable future for Aluminium Dunkerque and continued economic benefit for the wider community.”

“Liberty House has a track record of investing in similar assets, which should secure a long-term sustainable future for Aluminium Dunkerque.”

It is reported that the deal is part of GFG Alliance’s €2bn ($2.3bn) investment programme launched in France.

According to Liberty, it plans to invest and develop the 570-worker plant, as well as create thousands more jobs on-site.

With the deal, Liberty aims to capitalise on the growing market for aluminium components among Europe’s vehicle manufacturers by working with stakeholders to develop downstream manufacturing activities linked to the smelter at Dunkirk.

GFG Alliance executive chairman Sanjeev Gupta said: “Our detailed analysis leads us to believe that Dunkirk is the best location to drive forward our downstream automotive strategy.

“We want to develop the plant into an international centre of aluminium and downstream aluminium products expertise, demonstrating our ‘GREENALUMINIUM’ strategy. This investment will help fulfil our ambitions in the sector, further enabling us to capitalise fully on expected growth in demand for aluminium over the coming years.”