Anglo-Australian mining giant Rio Tinto announced yesterday that it had come to an agreement for the sale of its Lochaber plant to SIMEC Group and Liberty House for US$410 million.
According to press releases issued by the companies involved, SIMEC’s sister company Liberty House will be the operator of the smelter. The sale includes hydroelectric facilities Kinlochleven and Lochaber, as well as the one hundred thousand acre parcel at the foot of Ben Nevis upon which these facilities are situated.
The transaction is expected to be completed within the next four weeks. SIMEC indicates that it is purchasing the assets in question using both equity and funds raised via a securitization program. The Scottish Government is backing the purchase as well, in part by an agreement to purchase power from the facility’s hydroelectric plant.
“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,” said Rio Tinto Aluminium chief executive Alf Barrios. “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.”
“This is a significant boost to our renewables portfolio and will be another major step towards reducing our carbon footprint in metals production,” commented SIMEC Group’s parent company GFG Alliance’s strategic board executive chairman Sanjeev Gupta. “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.”
“I am delighted at this news from Rio Tinto today,” said the Scottish Government’s Cabinet Secretary for Rural Economy and Connectivity Fergus Ewing. “The sale of both the smelter and hydro power station increases the chance of the site having a viable, long-term future.
“This is great news for the whole local community and especially for the workers at the smelter. Subject to all necessary agreed processes, the deal implemented will safeguard 150 jobs and has the potential to create hundreds more,” he concluded.