Rio Tinto and Giampaolo Group have created the Matalco joint venture, aiming to meet the ever-growing demand from manufacturers for low-carbon materials. Combining the strengths of North America's largest primary and secondary aluminium producers, this partnership stands as an inspiration for the industry to strive towards sustainability.
Rio Tinto's acquisition of a 50% equity stake in Matalco for $700 million, subject to usual closing adjustments, marks a significant step forward in this journey.
Rio Tinto is excited to announce the launch of Matalco products, which will allow the company to offer its esteemed customers a comprehensive range of aluminium products. Their product suite will include low-carbon primary aluminium produced with hydropower and a diverse range of recycled aluminium solutions.
With this investment, Rio Tinto aims to strengthen our aluminium business in the US, a region where demand for recycled aluminium is predicted to increase by more than 70% from 2022 to 2032. This growth will be driven by the transportation, construction, and packaging sectors. Moreover, it is forecasted that global recycled aluminium consumption will grow by more than 60% over the same period, which presents a significant opportunity for Rio Tinto to expand its footprint in this space.
Matalco's position as the operator of the joint venture's six facilities in the United States and Canada, which have the capacity to produce roughly 900,000 tonnes of recycled aluminium annually, will remain intact. Matalco is committed to providing closed-loop solutions that transform customers' scrap into high-quality aluminium slabs and billet. Matalco produced around 400,000 tonnes of recycled aluminium, with billet accounting for 78% and slab for 22%, during the eight-month period that ended on 30 September 2023.
During the same period, Matalco generated an EBITDA of $165 per tonne. Matalco doubled its production capacity over the last five years, and Rio Tinto and Giampaolo Group will collaborate to explore opportunities to grow the Matalco business and expand output, with a particular focus on North America.
The Chief Executive from Rio Tinto, Jakob Stausholm, spoke out: "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."
The CEO of Giampaolo Group, Chris Galifi, implied: "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."
Rio Tinto is a global leader in low-carbon aluminium production. The company is investing in expanding its AP60 technology and establishing new recycling capabilities. They are also working on deploying ELYSISTM zero-carbon aluminium smelting technology. The Giampaolo Group is a multinational integrated metal corporation that operates within the recycling, manufacturing, and IT asset disposition space.
If you wish to learn more about the ever-evolving aluminium recycling sector, please have a look at AL Circle's specifically formulated report on the same, World Recycled Aluminium Market Analysis.
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