Rio Tinto and Giampaolo Group Forge $700 Million Joint Venture, Elevating Matalco as Recycling Powerhouse
Rio Tinto, a globally recognized mining leader, and Giampaolo Group, a major player in the aluminium industry, have successfully concluded their transaction to establish the Matalco joint venture. This strategic alliance solidifies their presence as a dominant force in North America’s aluminium sector, strategically positioned to meet the rising demand for low carbon materials across various industries.
The deal involved Rio Tinto acquiring a 50% equity stake in the Matalco business from Giampaolo Group, valued at US$700 million. With approval from all necessary regulatory bodies, this move marks a substantial expansion in Rio Tinto’s aluminium operations, particularly in the United States. The U.S. market is anticipated to experience a 70% surge in recycled aluminium demand over the next decade, catering to sectors such as transportation, construction, and packaging. Globally, recycled aluminium consumption is projected to grow by over 60% during the same period.
Under this joint venture, Matalco will retain management of its six U.S. facilities and one in Canada, boasting a collective production capacity of approximately 900,000 metric tons of recycled aluminium annually. Recent performance metrics indicate impressive growth, with Matalco producing around 400,000 metric tons of recycled aluminium over an eight-month period ending September 30, 2023, comprising 78% billet and 22% slab and yielding an EBITDA of US$165 per tonne.
With Matalco’s production capacity more than doubling in the past five years, Rio Tinto and Giampaolo Group are poised to explore additional expansion opportunities, with an initial focus on the North American market.
Jakob Stausholm, Rio Tinto’s Chief Executive, expressed his optimism in a press release, stating, “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.”
Giampaolo Group CEO Chris Galifi echoed this sentiment, saying, “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.