GFG Alliance to increase Aluminium production to 1 million tonnes/year, more acquisitions to follow: Sanjeev Gupta

On 19^th October’20, Sanjeev Gupta, Executive Chairman and CEO of GFG Alliance in the London Metals Exchange (LME) Seminar, said: “GFG Alliance plans to boost its aluminium production capacity to at least 1 million tonnes/year within the next two years via acquisitions”

“This would be up from the group's current capacity of almost 600,000 tonnes/year of aluminium production”, Gupta told delegates at the virtual event.

He said: "We're targeting more acquisitions. Aluminium will play a vital role in the transition to a sustainable world, by reducing the weight in electric cars, for example, we see growing demand ahead."

The GFG Alliance Chief did not comment on whether further expansions might occur but revealed they would be in Europe. GFG's current aluminium production capacity is focused on Europe, where earlier this year it consolidated its recent aluminium acquisitions -- including Europe's biggest aluminium smelter at Dunkirk, the Lochaber smelter in Scotland and the Duffel rolling mill in Belgium -- together in its Alvance subsidiary, headquartered in Paris.

Gupta said: "We have to reduce aluminium's carbon footprint dramatically. In aluminium as with steel, this is an area where Europe can lead...now is the time to create a low carbon aluminium industry right here in Europe."

“Europe's aluminium consumption has risen 7% over the last 15 years but production in the region has fallen 20% over the same period. The shortfall has been made up mainly by imports from China, where the aluminium industry uses a lot of coal and has a huge carbon footprint," he said.

GFG's SIMEC energy subsidiary earlier this month declared it is making a major renewable energy investment in northwest Spain, in a 1.2 GW solar and wind power facility to be completed in 2023, and which may facilitate the group's entry into energy-intensive industrial production in Spain.

However, the group has also been engaged in discussions for a potential buy-out of US aluminium giant Alcoa's troubled San Ciprian smelter in Galicia, northwest Spain, which has been plagued by high electricity prices, although no agreement had been reached by the end-September deadline for talks to be concluded and Alcoa has announced this smelter will close.

As per the sources close to GFG have nonetheless indicated the group may still be interested in taking over the 228,000 tonnes San Ciprian smelter.