Rio Tinto to invest in Canada aluminium smelters when market improves

Rio Tinto Alcan’s CEO Alfredo Barrios announced on Wednesday their plans to expand smelting capacities in Canada once the aluminium gains strength.

Barrios says, since the aluminium prices have fallen since last year, the market situation is not conducive for further investment at the moment. He however maintains that in the long term, bolstered by the strong use of aluminium in the automotive industry, the market is expected to grow till 2025 providing ample opportunities for new investments.

"If the market starts improving and the returns start remunerating the investments then there are a number of projects that we have across the world, even in Quebec, to potentially grow," said Barrios. He specifically mentions the new Alouette smelter and expansion plans of the AP60 pilot project in Quebec.

The CEO reveals that Rio Tinto is the only company in the west to have heavily invested in the aluminium sector despite the weak conditions and low prices, spending more that US$ 7.5 billion in Canada over the past five years.

US$ 4.8 billion was spent for the modernization of the Kitimat smelter alone which is due to open in the coming months.

While the aluminium market continues to be volatile, the company is focusing on improving the productivity and curbing the costs. Aluminium was the sector that saw the most improvement last year increasing the earnings by 124% to US$1.25 billion.