A New Joint Venture
The Giampaolo Group of Companies, comprised of Matalco and scrap processing firm Triple M Metal, is soon to be co-owned by London-based Rio Tinto PLC. Matalco specializes in producing recycled-content aluminum.
A new joint venture (JV) has been announced involving the global mining giant, Rio Tinto, and the Giampaolo Group. As part of the agreement, Rio Tinto will take a 50 percent stake in Matalco, which is currently wholly owned by the Brampton, Ontario-headquartered Giampaolo Group Inc.
Rio Tinto estimates that its joint venture stake is worth a total of $700 million, with regulatory permissions required before it can be completed by mid-2024.
As per a news announcement from Rio Tinto, Giampaolo Group’s Triple M Metal will remain responsible for providing recyclable feed to the joint venture. Additionally, the leadership of Matalco will oversee its respective operations. Once the deal is finalized, Rio Tinto will also handle the sale and distribution of Matalco’s products.
“I am delighted to partner with Rio Tinto, a leader in the global aluminum industry,” Chris Galifi, Giampaolo Group’s CEO, 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.”
A Leader in the Industry
Matalco stands out as a leading manufacturer of recycled aluminum billet and slab products, with seven locations across North America. This includes six facilities in the United States, and one located in Canada. The company can produce up to 900,000 metric tons of recycled-content aluminum each year.
“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,” Jakob Stausholm, Rio Tinto’s Chief Executive, comments.
Through the JV partnership arrangement, the firms will share equal membership on a board charged with overseeing Matalco’s vital strategic decisions ranging from executive appointments to maintaining safety and environmental protocols, as well as adhering to established social and governance regulations.
Exploring the market from a strategic perspective, the well-known international mining corporation has explained that the joint venture will allow them to supply buyers with a wider range of primary, recycled, and blended aluminum goods of superior quality and lower carbon output. These solutions are ideal for customers who are striving to lower their own carbon footprint.
Arvida Smelter Specifics
Last year, Rio Tinto made a push to increase its presence in the North American aluminum recycling sector through its intention to initiate recycling capabilities at its Arvida smelter located in Quebec.
Rio Tinto has unveiled a plan to source and remelt aluminum scrap from used vehicles and construction materials, such as windows and door frames, for use in aluminum billets at its Arvida smelter and other plants in Quebec. The recycled content produced by this initiative will help create a more sustainable supply chain for the company.
“The new recycling center will allow for a percentage of recycled content to be included in the current production of aluminum billets at the Arvida plant but also in other products from our Quebec facilities (rolling ingots and casting alloys) destined for the automotive, packaging and construction markets,” a media advisor for the U.S. and Canada with Rio Tinto, Malika Cherry, stated. “Depending on the composition of the scrap, the remainder will be sent to other regional casting centers.”
She added, “The aluminum used will come from clean postconsumer scrap, primarily from metal recyclers located in Quebec, which will reduce the environmental footprint even more. Discussions are still ongoing with potential recyclers.”
“Investing in new recycling facilities in Arvida is another step in our strategy to expand our offering of low-carbon aluminum products and integrate the circular economy into our value chain,” Sebastien Ross, Rio Tinto’s Aluminum Managing Director of Atlantic Operations explains. “This will allow us to continue to meet our customers’ growing demand for responsible, traceable and responsible products.”
Rio Tino anticipates that the recycling center will be up and running by mid-2024. Work is due to begin soon on the project, which will involve erecting a remelting furnace equipped with regenerative burners and an automated scrap loading system.
Estimations indicate that the endeavor could bring $23.05 million (CA$30 million) worth of economic benefits to Quebec, and would result in approximately 10 new full-time positions being created at Arvida’s facility.
A “Wider Array” of Customers
The firm announced that the new 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.” Matalco’s current products include billet and slab from 3000-, 5000-, 6000- and 7000-series, both directly produced and tolled.
By 2028, it is projected that over half of U.S. aluminum consumption will be sourced from post-consumer or pre-consumer waste, according to a recent analysis conducted by CRU Group in London, and reported by Rio Tinto.
