Jul 22, 2023

Rio Tinto and Giampaolo Group enter into Matalco aluminum recycling joint venture Rio Tinto and Giampaolo Group, one of North America’s largest fully-integrated metal management businesses, have entered into an agreement to form a joint venture to manufacture and market recycled aluminum products. The transaction reflects the joint venture partners’ shared commitment to meeting the increasing demand for low-carbon aluminum as a key material in the energy transition. Under the terms of the agreement, Rio Tinto will acquire a 50% equity stake in Giampaolo Group’s wholly-owned Matalco business for $700 million subject to usual closing adjustments. Matalco is a leading producer of high-quality recycled aluminum billet and slab products. It operates six facilities in the United States and one in Canada, with the capacity to produce approximately 900,000 tonnes of recycled aluminum per annum. Giampaolo Group subsidiary Triple M Metal will be responsible for the supply of recyclable feed to the joint venture with Matalco’s leadership team continuing to manage its operations. Rio Tinto will be responsible for sales and marketing of Matalco products following a transition period after completion of the transaction. The joint venture partners will provide oversight to the Matalco management team on matters such as strategic decisions, including executive appointments, safety and ESG standards through a board with equal representation. The joint venture will enable Rio Tinto to provide a broader range of high-quality and low-carbon, primary, recycled, and blended aluminum products, at a time when customers are looking for solutions to lower their carbon footprint. The joint venture will also enhance Matalco’s current service offering to a wider array of customers, while securing access for low-carbon primary metal for its operations. Recycled aluminum is forecast to account for more than half of United States demand by 2028. The transaction is subject to customary regulatory approvals and is expected to be completed in the first half of 2024. Rio Tinto is a global leader in aluminum, with a large-scale, vertically-integrated business: bauxite mines and alumina refineries as well as smelters producing aluminum certified as responsible. The Matalco joint venture continues Rio Tinto’s investment in building its supply of low-carbon aluminum in North America. Previous investments include $1.1 billion to expand the use of its AP60 technology at its Arvida aluminum smelter in June 2023, $29 million to establish new recycling capabilities at the Arvida smelter in August 2022, and $188 million to increase billet production capability at the Alma smelter in July 2022, all in the Saguenay-Lac-Saint-Jean region of Québec. Rio Tinto is also working with the Governments of Canada and Québec towards a deployment of the ELYSIS zero-carbon aluminum smelting technology at its Saguenay–Lac-Saint-Jean facilities. With the current development pathway, the ELYSIS joint venture between Rio Tinto and Alcoa aims to have its technology available for installation from 2024 and the production of larger volumes of carbon-free aluminum approximately two years later. The Giampaolo Group was founded over 50 years ago in Toronto, Ontario with a distinct focus in the recycling industry. Since established, the organization has evolved into a multinational integrated metal corporation. The Giampaolo Group focuses on harvesting waste within the metal ecosystem by operating within the recycling, manufacturing, and IT asset disposition space. Established in 2005, Matalco is a leading producer of recycled aluminum billet and slab. From the initial foray into 6XXX series billet, Matalco currently produces a variety of 3XXX, 5XXX, 6XXX and 7XXX billet and slab while offering both direct and tolled products. With seven remelting and casting facilities spread across North America, Matalco’s primary focus is to supply upstream producers of extruded, forged, and rolled products while relying on Triple M Metal to supply recyclable raw material to provide a closed-loop solution to its customers.