GFG Alliance buys Europe’s largest aluminium smelter

The Dunkerque smelter

GFG ALLIANCE, the UK-based metals, mining and energy group owned by Sanjeev Gupta, has bought Europe’s largest aluminium smelter in Dunkerque, France, from Rio Tinto for US$500m.

The acquisition, by subsidiary Liberty House, marks the start of a €2bn (US$2.4bn) investment programme in France and an expansion by the group into continental Europe. The Dunkerque smelter currently employs around 570 workers. Liberty House will now begin a consultation process with those employees, along with the European Works Council and stakeholders, and ultimately plans to expand the site and create thousands more jobs, at the site itself and more widely.

Liberty House says that buying the plant and developing downstream manufacturing activities will allow it to tap into a growing market for aluminium amongst European vehicle manufacturers. The aluminium content of vehicles made in Europe is expected to rise from 3.3m t/y now to 4.3m t/y by 2024, as manufacturers seek to build more lightweight vehicles and reduce carbon footprints. The smelter will continue to supply existing customers with aluminium slabs and ingots.

“Our detailed analysis leads us to believe that Dunkerque is the best location to drive forward our downstream automotive strategy. Aluminium Dunkerque has a high-quality aluminium operation benefitting from a top-class workforce and management. This will be our key strength when embarking on our ambitious plans,” said Gupta.

He added that GFG wants to develop the Dunkerque smelter into an international centre of aluminium expertise, using its GREENALUMINIUM strategy, which is based on its GREENSTEEL strategy to reduce the carbon footprint of production, make processes more sustainable, use more innovative technologies, and be more flexible to customer demand.

“The binding offer for the sale of Aluminium Dunkerque represents the best option for the future development of the site while also delivering value for Rio Tinto as we continue to streamline our portfolio. Liberty House has a track record of investing in similar assets, which should secure a long-term sustainable future for Aluminium Dunkerque and continued economic benefit for the wider community,” said Alf Barrios, Rio Tinto’s chief executive aluminium.

GFG Alliance bought Australian metals and mining business Arrium in September 2017 and launched a similar investment programme to expand and improve its Whyalla steelworks. Liberty House has also bought a number of steelworks in the UK from Rio Tinto and Tata Steel, including in Dalzell and Clydebridge, again with investment and expansion plans. It also bought Rio Tinto’s aluminium smelter at Lochaber in Scotland in December 2016, which is currently undergoing a £120m (US$162m) modernisation programme.