23 Nov Rio Tinto agrees $410m sale of Scottish assets to SIMEC
Rio Tinto is selling some assets in Scotland to SIMEC in a deal worth US$410 million.
The agreement announced today comprises the sale of Rio’s 100%-owned Alcan Aluminium which includes the smelter in Lochaber and hydroelectric facilities at Kinlochleven.
SIMEC will continue to operate the smelter through the Liberty House Group, its sister company in the GFG Alliance which is owned by members of the Gupta family, according to a Rio’s statement.
Rio Tinto aluminium chief executive Alf Barrios said: “Our priority has been to ensure a long-term sustainable future for Lochaber and economic benefit for the wider Fort William community. There was significant interest in the assets, but SIMEC is committed to continuing operations at the smelter and working with the community on further economic development.
He added: “This is a value-creating sale for Rio Tinto and represents another example of refining our portfolio to focus on our suite of tier one assets.”
Sanjeev Gupta, GFG Alliance executive chairman, said the acquisition would provide a significant boost to GFG’s renewable portfolio and will represent a major step to reducing its carbon footprint in metal production.
“This is a natural next step for us in our Scottish investment programme and is a springboard for wider manufacturing growth, creating many more jobs in Scotland,” Gupta said. “We are grateful for the continuing support of the Scottish Government and for their far-sighted approach to industry.”
The Scottish Government’s cabinet secretary for rural economy and connectivity Fergus Ewing commended the deal saying it will help to secure the assets’ future.
“I look forward to an exciting new chapter in the history of the Lochaber complex, with the UK’s last remaining aluminium smelter at Fort William continuing as a key component of Scotland’s industrial capability and a major source of employment in the Highlands and Islands. We have built up excellent working relations with Liberty House in our successful dealings in Dalzell and Clydebridge. Now a new exciting chapter of industrial development is set to begin.”
The final payment is expected no later than the end of February 2017 and will bring the value of Rio’s total divestments this year to $1.3 billion.