Rio Tinto has signed an agreement with integrated metal management business Giampaolo Group to form a joint venture (JV) to produce low-carbon recycled aluminium products.
The deal forms part of the JV partners’ efforts to meet surging demand for low-carbon aluminium, which is said to be a key material in the energy transition.
As per the agreement, Rio will acquire a 50% stake in the Matalco business from Giampaolo Group for $700m.
A producer of high-quality recycled aluminium billet and slab products, Matalco currently operates six facilities in the US and one in Canada. The facilities have the capacity to produce 900,000 tonnes per annum (tpa) of recycled aluminium.
Subject to customary regulatory approvals, the transaction is due for completion in the first half of 2024.
Giampaolo Group subsidiary Triple M Metal will manage the recyclable feed supply to the JV while Rio Tinto will be responsible for sales and marketing of the Matalco products.
Rio Tinto chief executive Jakob Stausholm said: “Investing in recycling is part of our drive to find better ways to deliver the low-carbon materials the world needs and provides a natural extension of our industry-leading primary aluminium business.
“We look forward to providing customers with aluminium solutions that meet their needs for low-carbon primary and recycled materials in partnership with Giampaolo Group, a leader in providing recycled material in North America.”
Rio Tinto expects the agreement to help in providing a broader range of quality, low-carbon aluminium products while enhancing Matalco's service offering.
The JV partners will provide oversight to Matalco's management team on matters such as strategic decisions, safety and ESG standards through a board with equal representation.
Giampaolo Group CEO Chris Galifi said: “Giampaolo Group and Rio Tinto have an excellent track record of creating successful collaborations to unlock value for customers and we look forward to joining forces to combine our complementary expertise in the recycling value chain with their experience and track record of innovation in the primary aluminium industry.”
