Rio Tinto and Giampaolo Group have entered into an agreement to form a joint venture to manufacture and market recycled aluminium products. The transaction reflects the joint venture partners’ shared commitment to meeting the increasing demand for low-carbon aluminium as a key material in the energy transition.
Under the terms of the agreement, Rio Tinto will acquire a 50 per cent equity stake in Giampaolo Group’s wholly-owned Matalco business for $700 million, subject to usual closing adjustments.
Matalco is a leading producer of high-quality recycled aluminium billet and slab products. It operates six facilities in the United States and one in Canada, with the capacity to produce approximately 900,000 tonnes of recycled aluminium per annum.
The joint venture will enable Rio Tinto to provide a broader range of high-quality and low-carbon, primary, recycled, and blended aluminium products, at a time when customers are looking for solutions to lower their carbon footprint.
The joint venture will also enhance Matalco’s current service offering to a wider array of customers, while securing access for low-carbon primary metal for its operations. Recycled aluminium is forecast to account for more than half of United States demand by 20282.
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.”
Giampaolo Group Inc. 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.”
The transaction is subject to customary regulatory approvals and is expected to be completed in the first half of 2024.