Rio Tinto has accepted a purchase offer from UK industrialist Sanjeev Gupta for its Dunkerque aluminium smelter, Europe’s biggest aluminium producer.
According to the sources, the purchase would be announced today unless there were any unforeseen circumstances. This is the latest investment by Mr Gupta’s company Liberty House that has been expanding its business operations by acquiring a number of assets in the metal and mining, shipping, recycling, banking and automotive sector in last four years. Mr Gupta was dubbed the ‘Man of Steel’ in a recent BBC documentary on his deal-making exploits.
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It was rumoured last month that Mr Gupta met with French president Emmanuel Macron earlier in the year to talk about his interest to invest in the Dunkerque smelter, located in northern France. The confirmed news came a week after Mr Gupta's GFG Alliance agreed to buy a coking coal mine in Australia.
One of its significant purchases was Rio Tinto's aluminium smelter in Scotland in 2016, for which it paid £330m. The Dunkerque plant is much larger than the Scottish smelter with an annual production capacity of 280,000 tons of aluminium while Lochlaber produced 47,000 tons.
The agreed amount has not yet been divulged by any source but the price offered is likely to be higher considering the capacity and size of the Dunkerque plant .
For Rio, the sale marks the latest step to streamline its portfolio and focus on its best-performing operations in iron ore, aluminium and copper while selling out its non-core assets. The Australian miner has already sold almost $8bn of assets, including most of its coal business in order to reduce debt and boost returns to its shareholders. This has helped the company to reduce debt and boost returns to shareholders.
The miner is also looking to sell a 205,000 tpy aluminium smelter in Iceland and its Pacific Aluminium business. The sale of the Dunkerque smelter was also driven by the turnaround in LME aluminium prices in 2017, which reached the highest in last five years driven by the output cut programme in China and exponential demand growth.
No official comment has been issued by Rio Tinto or Liberty House on this matter.
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