Rio Tinto and Giampaolo Group to partner on Matalco aluminium recycling venture

RIO TINTO and Giampaolo Group, one of North America's largest fully-integrated metal management businesses, are teaming up to manufacture and market recycled aluminium products as part of a joint venture to meet the increasing demand for low-carbon aluminium.  

Under the agreement, Rio Tinto will acquire a 50% equity stake in Giampaolo Group’s wholly-owned Matalco business for US$700m.  

Matalco produces aluminium slab and billet for the rolling, extrusion, and forging industries. It operates six facilities in the US and one in Canada, and has the capacity to produce approximately 900,000 t/y of recycled aluminium. 

Triple M Metal, a subsidiary of Giampaolo Group, will be responsible for the supply of recyclable feed to the joint venture, while Matalco will manage operations. Rio Tinto will be responsible for sales and marketing of Matalco products following a transition period after completion of the transaction, which is expected in the first half of 2024. 

Rio Tinto said the joint venture will enable the global mining group to provide a broader range of high-quality and low-carbon, primary, recycled, and blended aluminium products, and will secure access for low-carbon primary metal for Matalco’s operations. It noted that according to CRU’s aluminium longterm market outlook, recycled aluminium is forecast to account for more than half of the US’s demand by 2028. 

Chris Galifi CEO of Giampaolo Group said: “I am delighted to partner with Rio Tinto... We have steadily invested within the recycling supply chain and have grown the Matalco business over the past 18 years, based on our strategy focussing on a circular economy, and are extremely proud of the high-quality, low-carbon products we produce.” 

A significant source of CO2

Aluminium is seen as a key material in the energy transition due to its use in many technologies such as lightweight vehicles and solar energy, which uses aluminium for various components. 

However aluminium production is also a significant source of CO2 as it uses a considerable amount of electricity. According to the IEA, in 2022 the aluminium sector was responsible for nearly 270m t of direct CO2 emissions — about 3% of the world’s direct industrial CO2 emissions. 

Although the global average direct emissions intensity of aluminium production has been declining moderately, at an average rate of almost 2% per year over the past decade, the IEA says more needs to be done to reduce CO2 in line with the net zero emissions by 2050 (NZE) scenario. This includes developing and deploying near zero emission technologies, and increasing scrap collection, sorting and recycling.