Rio Tinto Adds New Aluminum Production to Hot Metals Market

(Bloomberg) -- Rio Tinto Plc is investing $87 million to increase North American aluminum output as the metals giant sees booming demand for electric vehicles, solar panels and recyclable packaging amid a global push to curb climate change.

Rio Tinto will add 26,500 metric tons of capacity at its smelter in the Saguenay-Lac-Saint-Jean region of Quebec by 2023, with the investment lifting production by 45% and supporting about 100 existing jobs, the company said Wednesday in a statement. The additional capacity would be equal to about 0.7% of annual North American production.

“North America has a huge energy transition, huge demand for aluminum, so let’s provide more low carbon aluminum into that,” Ivan Vella, chief executive of Rio Tinto Aluminum, said in a phone interview. “We see growing demand for packaging as a significant opportunity to continue to make a difference, EVs and vehicles in general are consuming more aluminum, and then you get to solar panels that need aluminum as well.”

Rio Tinto, one of the world’s largest aluminum producers, projects the global aluminum market will rise at an average rate of 3.3% per year over the next decade.

The announcement comes as aluminum has surged more than 30% this year, boosted by soaring demand as economies reopen when there are increasing shortages of the lightweight industrial metal across the world. Analysts remain bullish on the metal’s outlook, while others indicate that demand momentum is now past its cyclical peak. Rio Tinto is the second largest aluminum producer outside China.

Rio Tinto produced about 1.8 million metric tons in Canada in 2020. The company expects the Canadian output will be slightly lower this year due to a strike that lasted more than two months at its Kitimat smelter in British Columbia. Shares of Rio rose 0.4% in London on Wednesday.

(Updates job context in second graph, Canadian output and shares in final graph.)

More stories like this are available on bloomberg.com

©2021 Bloomberg L.P.