Miner Rio Tinto announced late last week that it had completed the $500 million sale of its Dunkerque aluminum smelter.
Liberty House, part of steel tycoon Sanjeev Gupta’s GFG Alliance, purchased the aluminum smelter. The smelter in northern France began operation in 1991 and has an annual capacity of around 270,000 tons of aluminum, according to information on Rio Tinto’s website.
“As previously announced, the proceeds will be returned to shareholders, with the precise timing and form to be announced with Rio Tinto’s 2018 full year results,” Rio Tinto said in a release. “Rio Tinto estimates that there will be no material tax payable on this transaction.”
The plant will be renamed Liberty Aluminium Dunkerque. GFG is carrying out feasibility studies regarding the possibility of developing a “wider integrated manufacturing business” from the smelter, including components for automobiles.
“Today’s completion follows GFG’s acquisition earlier this year of France’s only remaining producer of aluminium vehicle wheels, AR Industries – now called Liberty Wheels France – which was already a key customer of the Dunkerque smelter,” GFG said in a prepared statement. “The deal marked a significant move into the French downstream manufacturing sector and saved over 90 percent of the jobs at the Chateauroux plant.”
“Today is a real milestone in our European investment journey and the fulfilment of our promise to establish a firm foundation for a new vibrant and integrated industrial business in France that will create high-value products that sustain high-value jobs,” said Gupta, GFG’s executive chairman.
“Liberty Aluminium Dunkerque and Liberty Wheels France provide excellent facilities, expertise and skilled workforces that enable us to grow strongly through long-term investments. The studies for Liberty Aluminium Dunkerque’s investment in added-value aluminium have confirmed our initial assumptions and we’ll continue our work on developing the investment programme.”
The completion of the deal comes almost a month after GFG announced it had secured financing for the acquisition.
Liberty House acquired another aluminum smelter from Rio Tinto in 2016, the Lochaber smelter in Scotland, at a price tag of $410 million, which has a capacity of 47,000 tons per year — making the Dunkerque buy seem like a relative bargain.