Rio Tinto and Giampaolo Group entered into an agreement to form a joint venture to manufacture and market recycled aluminum products. Under the terms of the agreement, Rio Tinto will acquire a 50% equity stake in Giampaolo Group’s wholly-owned Matalco business. 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.
“I am delighted to partner with Rio Tinto, a leader in the global aluminum industry,” said Chris Galifi, CEO of Giampaolo Group. “We have steadily invested within the recycling supply chain and have grown the Matalco business over the past 18 years, based on our strategy focusing on a circular economy, and are extremely proud of the high-quality, low-carbon products we produce. 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 high-quality recycled aluminum billet and slab products. It operates six facilities in the U.S. and one in Canada, with the capacity to produce approximately 900,000 tonnes of recycled aluminum per annum. Over the past several years, the company has seen significant capacity growth, with the launch of new facilities across North America — such as the company’s new rolling ingot plant in Kentucky, which started operation earlier this year.
Under the new agreement, Giampaolo Group subsidiary Triple M Metal will be responsible for the supply of recyclable scrap feed to the joint venture with Matalco’s leadership team, which will continue 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. “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,” noted Jakob Stausholm, chief executive of Rio Tinto. “We look forward to providing customers with aluminum solutions that meet their needs for low-carbon primary and recycled materials in partnership with Giampaolo Group a leader in providing recycled material in North America.”
The joint venture will also enhance Matalco’s current service offering, expanding it to a wider array of customers, while also securing access for low-carbon primary metal for its operations. Recycled aluminum is forecast to account for more than half of U.S. demand by 2028.
The transaction is subject to customary regulatory approvals and is expected to be completed in the first half of 2024.