Rio Tinto Reaches $345 Million Agreement To Sell Its Aluminum Assets

SEATTLE (Scrap Monster):  Norwegian Aluminum major Norsk Hydro ASA has forwarded a $345 million binding offer to acquire Rio Tinto’s aluminum assets. The offer covers 100% acquisition of Rio Tinto’s ISAL smelter in Iceland, the remaining 53% stake in the Dutch anode facility Aluchemie and 50% stake in Swedish aluminum fluoride plant Aluflour.

A consultation process on the offer is expected to commence soon. The rule of the state calls for statutory consultation with Rio Tinto employees and other stakeholders. Apart from successful consultations, the offer also needs to obtain necessary approvals from the EU competition authorities. The deal, subject to post-closing adjustments, is expected to materialize during the second quarter of 2018. The execution of the deal will make ISAL, Aluchemie and Alufluor part of Norsk Hydro’s global operations.

The transaction is perfectly in line with the company’s strategy to be a fully integrated aluminum company. The acquisition of ISAL will boost the company’s primary aluminum production capacity by 210,000 tonnes to 2.4 million mt during this year, thereby raising its aluminum production based on renewable energy to over 70%. Further, the acquisition will further strengthen Hydro’s position as the leading extrusion ingot supplier in the European region. Incidentally, the ISAL plant has a capacity to produce 230,000 mt of extrusion ingot.

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Hydro President and CEO Svein Richard Brandtzæg stated that the offer demonstrates the company’s strong belief in aluminum. The technology pilot, currently running in Norway, will be expanded to Hydro’s global facilities. The ISAL plant, which runs on the same technology platform, is likely to benefit the most, he said. The deal is expected to strengthen its position in Europe by significantly reducing its carbon footprint, Brandtzæg added.

Meantime, Rio Tinto Aluminium Chief Executive Alf Barrios stated that ISAL, Aluchemie and Alufluor are a natural fit with Hydro’s portfolio and the deal is expected to secure the long term future for the sites.