Rio Tinto has agreed to sell its assets at Lochaber, Scotland to SIMEC for a total of $410 million, subject to certain conditions precedent and consultation with employees.
Rio Tinto Aluminium Chief Executive Alf Barrios said the transaction comprises the sale of the company’s 100% shareholding in Alcan Aluminium UK Limited which includes the operating smelter, the hydroelectric facilities at Kinlochleven and Lochaber as well as all associated land.
“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,” Mr Barrios added.
“At the same time, 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.”
If the deal goes through, the smelter will be operated by the Liberty House Group, SIMEC’s sister company within the international GFG Alliance.
GFG Alliance Strategic Board Executive Chairman Sanjeev Gupta described the agreement as “a significant boost” for the company’s renewables portfolio and as “another major step” towards reducing its carbon footprint in metals 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,” Mr Gupta said.
“We are grateful for the continuing support of the Scottish Government and for their far-sighted approach to industry.”
According to Rio Tinto, the agreement includes a payment on completion of £180 million, plus an additional payment of £150 million not later than 28 February 2017.
The sale is expected to close mid-December 2016.