REG - Rio Tinto - Rio Tinto & Giampaolo Group complete Matalco JV

Rio TintoAnnouncement

01/12/2023 17:30

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RNS Number : 4597V  Rio Tinto PLC  01 December 2023

 

Notice to
ASX/LSE

 

Rio Tinto and Giampaolo Group complete Matalco aluminium recycling transaction

1 December 2023

 

 

LONDON - Rio Tinto and Giampaolo Group have completed a transaction to form
the Matalco joint venture, combining the strengths of North America's largest
primary and secondary aluminium producers to meet the growing demand from
manufacturers for low carbon materials.

 

Following the receipt of all regulatory approvals, Rio Tinto has acquired a
50% equity stake in the Matalco business from Giampaolo Group for
$700 million, subject to usual closing adjustments.

 

As Rio Tinto begins to market Matalco products, Rio Tinto will be able to
offer customers a full suite of aluminium products including low-carbon
primary aluminium made with hydropower and a diverse portfolio of recycled
aluminium solutions.

 

The investment will expand Rio Tinto's aluminium business in the US, where
demand for recycled aluminium is forecast to increase by more than 70% from
2022 to 2032, driven by the transportation, construction, and packaging
sectors. Over the same period, global recycled aluminium consumption is
forecast to grow by more than 60%. 1  (#_ftn1)

 

Matalco will remain the operator of the joint venture's six facilities in the
United States and its Canadian site, which together have a capacity to produce
approximately 900,000 tonnes of recycled aluminium per annum. Matalco will
also continue to provide closed-loop solutions to transform customers' scrap
into high-quality aluminium slab and billet. For the eight-month period ending
on 30 September 2023, Matalco produced approximately 400,000 tonnes of
recycled aluminium, including 78% billet and 22% slab. For the same period,
Matalco generated an EBITDA of $165 per tonne.

 

Over the last five years, Matalco more than doubled its production capacity.
Rio Tinto and Giampaolo Group will be working together to assess opportunities
to continue growing the Matalco business and expand output, with an initial
focus on North America.

 

Rio Tinto Chief Executive Jakob Stausholm said: "Creating the Matalco joint
venture gives Rio Tinto a leading position in the rapidly growing North
American recycled aluminium market, allowing us to offer a full complement of
low-carbon recycled products. We look forward to working in partnership with
Giampaolo Group to support the drive to net zero by expanding recycled
production and providing closed-loop recycling solutions to help our customers
reduce their carbon footprint."

 

Giampaolo Group CEO Chris Galifi said: "We are thrilled about beginning our
partnership with Rio Tinto, on forming a joint venture for Matalco. This
collaboration showcases our dedication to continuously evolving our production
of high-quality, low-carbon aluminium. We look forward to continuing to grow
with our new partners while providing products that support sustainability."

 

 

About Rio Tinto Aluminium

 

Rio Tinto is a global leader in aluminium, with a large-scale,
vertically-integrated business: bauxite mines and alumina refineries as well
as smelters producing aluminium certified as responsible. The Matalco joint
venture continues Rio Tinto's investment in building its supply of low carbon
aluminium in North America. Previous investments include $1.1 billion to
expand the use of its AP60 technology at its Arvida aluminium smelter in June
2023 and $29 million to establish new recycling capabilities at the Arvida
smelter in August 2022, both in the Saguenay-Lac-Saint-Jean region of Quebec.

 

Rio Tinto is also working with the Governments of Canada and Quebec towards a
deployment of the ELYSIS(TM) zero carbon aluminium smelting technology at its
Saguenay-Lac-Saint-Jean facilities. With the current development pathway, the
ELYSIS joint venture between Rio Tinto and Alcoa aims to have its technology
available for installation from 2024 and the production of larger volumes of
carbon-free aluminium approximately two years later.

 

 

About Giampaolo Group and Matalco

 

The Giampaolo Group was founded over 50 years ago in Toronto, Ontario with a
distinct focus in the recycling industry. Since established, the organization
has evolved into a multinational integrated metal corporation. The Giampaolo
Group focuses on harvesting waste within the metal ecosystem by operating
within the recycling, manufacturing, and IT asset disposition space.

 

Established in 2005, Matalco is a leading producer of recycled aluminium
billet and slab. From the initial foray into 6XXX series billet, Matalco
currently produces a variety of 3XXX, 5XXX, 6XXX and 7XXX billet and slab
while offering both direct and tolled products. Headquartered in Brampton,
Ontario, the company has solidified its position as a frontrunner in the
industry. With seven remelting and casting facilities spread across North
America, Matalco employs over 650 skilled professionals and operates an
extensive logistics network to service its customers. Its primary focus is to
supply upstream producers of extruded, forged, and rolled products while
relying on Triple M Metal to supply recyclable raw material to provide a truly
closed loop solution to its customers.

 

Contacts

Please direct all enquiries to media.enquiries@riotinto.com

 

 

 

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This announcement is authorised for release to the market by Andy Hodges, Rio
Tinto's Group Company Secretary.

 

LEI: 213800YOEO5OQ72G2R82

Classification: 3.1 Additional regulated information required to be disclosed
under the laws of a Member State

 

 

 

riotinto.com

 

Category: Canada

 1  Source: CRU Aluminium Long Term Market Outlook, December 2022.

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