Rio Tinto, a leading global mining group, and Giampaolo Group, a prominent player in the aluminium industry, have officially completed their transaction to form the Matalco joint venture. This new alliance positions them as a powerhouse in North America’s aluminium sector, focusing on meeting the surging demand for low carbon materials among manufacturers.
The deal was sealed with Rio Tinto acquiring a 50% equity stake in the Matalco business from Giampaolo Group. This transaction was valued at US$700 million, subject to standard closing adjustments. This strategic move follows the approval from all necessary regulatory bodies.
The partnership marks a significant expansion in Rio Tinto’s aluminium operations, particularly in the United States. The U.S. market is projected to witness over a 70% increase in recycled aluminium demand over the next decade, catering to industries such as transportation, construction, and packaging. Similarly, the consumption of recycled aluminium on a global scale is expected to grow by over 60% during the same period.
Matalco, under this joint venture, will continue managing its six facilities across the United States and one in Canada. These sites collectively boast a production capacity of around 900,000 metric tons of recycled aluminium annually. Matalco’s recent performance includes the production of approximately 400,000 metric tons of recycled aluminium over an eight-month period ending September 30, 2023. This production consisted of 78% billet and 22% slab, yielding an EBITDA of US$165 per tonne.
Matalco has demonstrated remarkable growth over the past five years, more than doubling its production capacity. Rio Tinto and Giampaolo Group are now set to explore further expansion opportunities for Matalco, initially focusing on the North American market.
Jakob Stausholm, Rio Tinto’s Chief Executive, commented on the venture in a press release.
“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.”
Echoing this sentiment, Giampaolo Group CEO Chris Galifi stated: “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.”
