Lochabar aluminium smelter to be sold to Liberty commodities mogul


Rio Tinto has announced they are selling their Scotland-based aluminium smelter, as well as their hydro-electric power plants, to industrials group Liberty.

The Lochaber assets are Rio Tinto’s only UK operational assets, yet their future has hung in the balance since the the company decided to launch a strategic review of the aluminium smelting facilities at the beginning of 2016.

Concern for the potential loss of 150 jobs for employees, and an additional 400 positions elsewhere in their supply chain have eased now news has broken that Liberty will be working in conjunction with Simec, their sister group, in order to purchase the aluminium smelter for a cool £330m.

A combined fund of money raised through equity and securitisation is paying for the purchase, and the move is set to further increase Liberty’s UK footprint under the guidance of Sanjeev Gupta’s, their commodities mogul, and his private expansion strategy.

This is not the first time Liberty has snapped up distressed British industrial assets, after a combination of international competition, high power prices, and greater costs have resulted in them coming on the market.

Mr Gupta noted, “This transaction fits very well with our vision to develop a sustainable and competitive metals industry in the UK as a key part of our global industrial business. 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.”

Liberty re-opened Newport’s steel plant last year, at the steel crisis’ height, and has gone on to purchase a number of Tata’s assets as the steel giant reassesses its position in the UK and the future of operations in Britain. In addition to this, Liberty were swift to snag assets from industrial group Caparo when the company collapsed in 2015.

More recently, Liberty orchestrated the reopening of Tata’s Dalzell facility near Glasgow, a steel plate mill that had been mothballed for some time.

The Lochaber move is unusual due to the nature of the aluminium smelter at Fort William, which receives its power from two hydro-electric plants close by. The sale also includes 100,000 acres of land used to capture rainwater and power the plants’ hydro-electric generators.

Lochaber is Rio’s smallest out of nine smelters owned worldwide, yet it still has an impressive production capacity of around 47,000 tonnes in aluminium annually.


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