Rio Tinto and Giampaolo Group Complete Matalco Aluminium Recycling Joint Venture

Establishment of a Major Recycling Venture

Rio Tinto and the Giampaolo Group have finalized their joint venture, creating a significant entity in North America's aluminium sector. Following the receipt of regulatory approvals, Rio Tinto has purchased a 50% stake in Matalco from the Giampaolo Group for $700 million, subject to customary closing adjustments.

Addressing Growing Market Needs

This joint venture is a strategic move to meet the surging demand for low-carbon materials among manufacturers. Rio Tinto's involvement will enhance its presence in the United States' aluminium market, responding to the anticipated growth in recycled aluminium, particularly in the transportation, construction, and packaging industries. The consumption of recycled aluminium is also expected to increase globally in the coming decade.

Operational Scope and Production

Matalco will manage the operations of the venture's six facilities in the United States and one in Canada, which collectively boast a production capacity of about 900,000 tonnes of recycled aluminium per year. Matalco focuses on converting scrap into high-quality aluminium slab and billet. For the eight months ending September 30, 2023, Matalco produced around 400,000 tonnes of recycled aluminium and reported an EBITDA of $165 per tonne.

Plans for Continued Expansion

Matalco has significantly increased its production capacity over the past five years. Rio Tinto and the Giampaolo Group are looking into further expansion and production increase opportunities, initially focusing on the North American market. The venture is geared toward addressing the rising need for recycled aluminium, critical in various industrial applications.

Additional Development: Solar Farm and Battery Storage for Amrun Bauxite Operations

In a related development, Rio Tinto has approved the construction of a new 12.4MW solar farm and 8.8MVa/2.1MWh battery storage system to supply renewable energy to its Amrun bauxite operations in Queensland. This project, part of Rio Tinto's global decarbonization strategy, aims to reduce emissions in the Pacific bauxite, alumina, and aluminium operations. Aggreko has been contracted to build, own, and operate the solar farm, complementing its existing diesel power station contract. The solar farm, expected to be operational by early 2025, will generate approximately 21 gigawatt hours of renewable power annually.