Rio Tinto and Giampaolo Group, one of North America's leading fully integrated metals management companies, have joined forces to establish a groundbreaking joint venture (JV) focused on the production and marketing of recycled aluminium products.

This significant collaboration highlights both partners' shared dedication to meeting the escalating demand for low-carbon aluminium, a pivotal material for driving the global energy transition.

According to the agreement's terms, Rio Tinto will acquire a 50% stake in Giampaolo Group's wholly-owned Matalco business for $700 million, subject to standard closing adjustments.

Matalco, renowned for its production of top-tier recycled aluminium billets and plates, operates six facilities in the United States and one in Canada, boasting an impressive annual production capacity of approximately 900,000 tonnes of recycled aluminium.

Under the joint venture, Triple M Metal, a Giampaolo Group subsidiary, will oversee the supply of recycled materials, while Matalco's proficient management team will continue to lead the company's operations.

Following a transition period post-transaction closure, Rio Tinto will take charge of marketing and selling Matalco's products. An equitable board of directors will be formed by the joint venture partners to provide strategic guidance to Matalco's management team, encompassing matters like executive appointments, ESG standards, and safety protocols.

The collaboration with Matalco empowers Rio Tinto to expand its portfolio of environmentally friendly, top-quality primary, recycled, and blended aluminium products, catering to customers' imperative needs for carbon footprint reduction.

Concurrently, Matalco will gain access to a broader customer base while securing its supply of low-carbon primary metal for ongoing operations. Analysts predict that recycled aluminium will constitute more than half of the United States' demand by 2028, indicating the joint venture's timeliness and market potential.

Rio Tinto's CEO, Jakob Stausholm, expressed enthusiasm for this venture, emphasising that investing in recycling aligns with the company's commitment to providing sustainable, low-carbon materials to the global market.

He sees this as a natural extension of Rio Tinto's preeminent role in the primary aluminium industry and anticipates delivering innovative solutions that meet customer demands in partnership with Giampaolo Group, a leader in recycled materials supply in North America.

Similarly, Giampaolo Group Inc.'s CEO, Chris Galifi, expressed delight in partnering with Rio Tinto, a distinguished player in the global aluminium sector. Having steadfastly invested in the recycling chain and advanced Matalco's business for the past 18 years, Giampaolo Group embraces a circular economy strategy, boasting pride in its production of high-quality, low-carbon products. Galifi believes that combining Rio Tinto's primary aluminium expertise with its complementary recycling value chain will result in added value for customers and drive further innovation in the industry.

The transaction is anticipated to be finalised by mid-2024, pending customary regulatory approvals, signifying a promising step forward in the pursuit of sustainable solutions for the aluminium industry. As the world grapples with the urgent need for eco-friendly alternatives, this joint venture represents a decisive stride towards a greener and more sustainable future.

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Source: Rio Tinto