Rio Tinto buys 50% stake in Matalco

Matalco, a recycled-content aluminum producer that is part of the Canada-based Giampaolo Group of companies along with scrap processing firm Triple M Metal, is set to be co-owned by London-based mining and metals production firm Rio Tinto plc.

Rio Tinto and the Giampaolo Group have entered into a joint venture (JV) agreement that involves Rio Tinto acquiring a 50 percent equity stake in Matalco, which currently is wholly owned by the Brampton, Ontario-based Giampaolo Group Inc.

The JV stake is valued at $700 million, according to Rio Tinto, and the transaction, subject to regulatory approvals, is expected to close in the first half of 2024.

Giampaolo Group subsidiary Triple M Metal will continue to be responsible for the supply of recyclable feed to the JV, according to a Rio Tinto news release, with Matalco’s leadership team continuing to manage its operations.

Rio Tinto, meanwhile, will be responsible for the sale and marketing of Matalco products shortly after completion of the transaction.

“I am delighted to partner with Rio Tinto, a leader in the global aluminum industry,” Giampaolo Group CEO Chris Galifi says. “We have steadily invested within the recycling supply chain and have grown the Matalco business over the past 18 years.

“Giampaolo Group and Rio Tinto have an excellent track record of creating successful collaborations to unlock value for customers and we look forward to joining forces to combine our complementary expertise in the recycling value chain with their experience and track record of innovation in the primary aluminum industry."

Matalco is a leading producer of recycled aluminum billet and slab products, operating six facilities in the U.S. and one in Canada, with the capacity to produce approximately 900,000 metric tons of recycled-content aluminum annually.

“Investing in recycling is part of our drive to find better ways to deliver the low-carbon materials the world needs and provides a natural extension of our industry-leading primary aluminum business," Rio Tinto Chief Executive Jakob Stausholm says.

The JV partners will provide combined oversight to Matalco on matters such as strategic decisions, including executive appointments, safety and environmental, social and governance standards through a board with equal representation.

Regarding strategy in the market, the global mining firm says the JV will enable it 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.

Rio Tinto already has a presence in the North American aluminum recycling sector via its efforts to establish recycling capabilities at its Arvida smelter in Quebec last year.

The firm says the JV also will “enhance Matalco’s current service offering to a wider array of customers while securing access for low-carbon primary metal for its operations.” Matalco currently produces a variety of  3000-, 5000-, 6000- and 7000-series billet and slab, offering direct and tolled products.

Recycled-content aluminum is forecast to account for more than half of U.S. demand by 2028, according to Rio Tinto, citing London-based CRU Group.