GFG Alliance executive chairman Sanjeev Gupta. Image: GFG Alliance.
BY ELIZABETH FABRI
BRITISH steel magnate Sanjeev Gupta’s GFG Alliance will pay $US500 million for Rio Tinto’s Aluminium Dunkerque smelter as part of a planned expansion into central Europe.
Rio Tinto announced it had received a binding offer from GFG Alliance’s industrial arm Liberty House, which it expected to complete in the second quarter of 2018, subject to final adjustments.
The deal followed GFG Alliance’s acquisition of Rio Tinto’s Lochaber Smelter and assets in Scotland in December 2016; however this would be the group’s first significant step into continental Europe.
GFG Alliance executive chairman Mr Gupta said Liberty planned to develop the 570-worker plant, and potentially create thousands more jobs on-site and for the wider community.
The company also hoped to capitalise on the growing market for aluminium components among European vehicle manufacturers by working with stakeholders to establish downstream manufacturing activities linked to the smelter.
“Our detailed analysis leads us to believe that Dunkerque is the best location to drive forward our downstream automotive strategy,” Mr Gupta said.
“Aluminium Dunkerque has a high-quality aluminium operation benefitting from a top-class workforce and management.
“We want to develop the plant into an international centre of aluminium and downstream aluminium products expertise, demonstrating our GREENALUMINIUM strategy.
“This investment will help fulfil our ambitions in the sector, further enabling us to capitalise fully on expected growth in demand for aluminium over the coming years.”
Liberty was also currently engaged in a formal bidding process to acquire Asco Industries; a business which owned steel mills and service centres at six locations across France.
Mr Gupta said it was French President Emmanuel Macron’s “pro-business environment” that attracted him to the region.
“This has motivated our ambition to establish a global hub for the group in France, not only investing heavily in aluminium, steel and automotive but also bringing our other divisions including energy, banking and property development to explore opportunities in France and Europe, also complementing and supporting Dunkerque,” he said.
Rio Tinto Aluminium chief executive Alf Barrios said the Dunkerque sale represented the best option for the future development of the site, as the major miner continued to streamline its 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,” Mr Barrios said.
Rio Tinto would now launch a consultation process with employees, stakeholders and relevant European works councils to finalise the bid.