Rio Tinto said Wednesday it has agreed to sell its aluminum-related operations, including a smelter and hydro power plant in Scotland, to privately-owned SIMEC for $410 million, or GBP330 million, fulfilling an earlier plan to dispose of some of its less profitable aluminum operations.
The sale comprises the sale of Rio Tinto's Alcan Aluminium UK Ltd. unit, which includes the operating aluminum smelter at Fort William, the hydroelectric facilities at Kinlochleven and Lochaber as well as all associated land.
SIMEC's intention is that the smelter will be operated by commodities firm Liberty House Group, its sister company within the international GFG Alliance, a holding company founded and owned by Indian business tycoon Sanjeev Gupta.
Mr. Gupta this year acquired two steel mills in Scotland from India-based Tata Steel Ltd. (500470.BY) and had planned to make a bid for Tata's remaining U.K. operations, largely in Wales, before Tata entered exclusive talks with another steelmaker, Germany's ThyssenKrupp AG (TKA.XE) to create a European joint venture.
"This is a significant boost to our renewables portfolio and will be another major step towards reducing our carbon footprint in metals production," said Mr. Gupta, chairman of GFG Alliance.
Subject to all necessary agreed processes, the deal will safeguard 150 jobs and has the potential to create hundreds more, Mr. Gupta said.
The agreement includes a payment on completion of GBP180 million, plus an additional payment of GBP150 million no later than Feb. 28, 2017.