A US$700-million investment barely burns a hole in Rio Tinto Ltd.’s pocket. The sum is less than five per cent of its 2022 annual income of roughly US$16 billion and isn’t supposed to dominate headlines from a financial perspective.
But the mining giant’s chief executive Jakob Stausholm will tell you that Rio’s recent purchase of a 50-per-cent stake in Brampton, Ont.-based Matalco Inc., a recycler of aluminum, is key to his company’s future and helped fill a gaping hole in its business.
“We have everything — the lowest carbon-contained primary aluminum in the world — but we were kind of missing something (without) a recycled product,” he said. “Now we have it. Recycling will continue to increase and that means that there will be more growth in secondary aluminum than primary aluminum. We want to be part of the growth as well.”
Demand for metals such as aluminum, lithium and copper is expected to increase in the near future as the world gradually transitions away from energy that depends upon fossil fuels such as coal and oil. For example, aluminum is used to make solar energy devices, while lithium is a key material in the batteries that power electric vehicles.
Companies have moved to produce more of these metals in recent years, so their dependence on recycled minerals in the 2020s has so far been minimal, according to the International Energy Agency (IEA). However, the Paris-based organization expects recycled metals to make larger contributions to the total supply from 2030 onward and to be “much more significant” by 2040.
Rio expects the demand for recycled aluminum in the United States to increase by more than 70 per cent from 2022 to 2032, buoyed by the transportation, construction and packaging sectors.
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