Rio Tinto and Giampaolo Group have entered into an agreement, establishing a joint venture to manufacture and market recycled aluminium products.
According to Rio Tinto, the agreement reflects the joint venture partners’ shared commitment to fulfilling the growing demand for low-carbon aluminium as a crucial commodity in the energy transition.
Under the agreement, Rio Tinto will acquire 50% of the Giampaolo Group’s Matalco subsidiary for $700 million.
Rio Tinto noted that Matalco is a world-class manufacturer of high-quality recycled aluminium billet and slab products. It has six facilities in the United States and one in Canada, with a total capacity of 900,000 tonnes of recycled aluminium annually.
Triple M Metal, a Giampaolo Group subsidiary, will supply recyclable feed to the joint venture, with Matalco’s leadership team continuing to supervise its operations. Following the conclusion of the agreement, Rio Tinto will be responsible for Matalco product sales and marketing.
The joint venture partners will supervise the Matalco management team through an equal representation board on strategic decisions, including executive appointments, safety, and ESG standards.
During a period when consumers are seeking ways to reduce their carbon footprint, the joint venture will allow Rio Tinto to provide a wider selection of high-quality and low-carbon, primary, recycled, and blended aluminium products. Along with providing access to low-carbon primary metal for its operations, the joint venture will also improve Matalco’s present service offerings to a wider range of clients. By 2028, more than half of the demand for aluminium in the United States is anticipated to come from recycled aluminium.
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.”
“I am delighted to partner with Rio Tinto, a leader in the global aluminium industry. We have steadily invested within the recycling supply chain and have grown the Matalco business over the past 18 years, based on our strategy focussing on a circular economy, and are extremely proud of the high-quality, low-carbon products we produce. 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,” Giampaolo Group Inc CEO Chris Galifi stated.
The transaction is scheduled to close in the first half of 2024, subject to customary regulatory approvals.
