Rio Tinto to sell its assets at Lochaber (Scotland) to SIMEC for $410 million (£330 million), said the company in its statement. Under the agreement Rio Tinto sells 100% in Alcan Aluminium UK Limited which includes the operating smelter, the hydroelectric facilities at Kinlochleven and Lochaber as well as all associated land.
The agreement includes a payment on completion of £180 million, plus an additional payment of £150 million not later than 28 February 2017. Rio Tinto has now agreed more than $1.3 billion in divestments this year, bringing the total value of divestments announced or completed to $5.3 billion since January 2013.
Rio Tinto Aluminium chief executive Alf Barrios said “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.
SIMEC’s intention is that the smelter will be operated by the Liberty House Group, its sister company within the international GFG Alliance.
GFG Alliance strategic board executive chairman Sanjeev Gupta said “This is a significant boost to our renewables portfolio and will be another major step towards reducing our 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. 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 said “Subject to all necessary agreed processes, the deal implemented will safeguard 150 jobs and has the potential to create hundreds more.
“I want to thank Rio Tinto for their positive engagement with Ministers and officials throughout the process and I will be sorry to see the company move out of Scotland after such a long association.
The Lochaber complex is with the UK’s last remaining aluminium smelter at Fort William, a key component of Scotland’s industrial capability and a major source of employment in the Highlands and Islands.
The sale is subject to certain conditions precedent and consultation with employees. It is expected to close mid-December 2016.