Transition complete: Matalco, a commitment to the future of aluminum recycling

Rio Tinto and Giampaolo Group have successfully completed the transaction to jointly form a company called Matalco, which combines the skills of the leading primary and secondary aluminum producers in North America. The objective of this union is to meet the growing need for low-carbon materials by manufacturers.

After obtaining all necessary regulatory approvals, Rio Tinto has acquired 50% of the Matalco business from the Giampaolo Group for US$700 million, subject to possible adjustments at closing.

With the introduction of Matalco products to the market, Rio Tinto will have the ability to provide its customers with a full range of aluminum products, including primary aluminum produced with low environmental impact hydroelectric power and a variety of recycled aluminum options for sustainable solutions.

Rio Tinto plans to expand its aluminum business in the United States, as demand for recycled aluminum is estimated to increase by 70% by 2032 due to sectors such as transportation, construction and packaging. World consumption of recycled aluminum is also expected to grow by 60% during the same period.

Matalco will also be responsible for operating the six facilities in the United States and its plant in Canada, with a total production capacity of 900,000 tons of recycled aluminum per year. In addition, the company will continue to offer efficient solutions to transform customers’ scrap into high-quality end products. In the last eight months, Matalco has produced 400,000 tons of recycled aluminum, 78% of which is billet and 22% scrap. During the same period, they earned a gross profit of US$165 per ton produced.

Over the past five years, Matalco has more than doubled its production capacity. Rio Tinto and Giampaolo Group will collaborate to identify potential opportunities to further expand Matalco’s business and increase production, with a focus on North America.

According to Rio Tinto CEO Jakob Stausholm, the creation of the Matalco joint venture will give them a dominant position in the rapidly growing North American recycled aluminum market. This collaboration will enable them to offer a wide range of recycled products with low carbon emissions and to work together with Giampaolo Group to achieve the goal of zero net emissions. The focus will be on expanding recycled production and providing recycling solutions that help customers reduce their carbon footprint.

For his part, Chris Galifi, the CEO of Giampaolo Group, expressed his enthusiasm to begin a partnership with Rio Tinto to form a joint venture called Matalco. “We are delighted to begin our partnership with Rio Tinto in forming a joint venture for Matalco. This collaboration demonstrates our dedication to the continued evolution of our high-quality, low-carbon aluminum production. We look forward to continuing to grow with our new partners while delivering products that support sustainability,” he concluded.