The industrial unit of Indian businessman Sanjeev Gupta's GFG Alliance offered $500 million to take over an aluminum smelter in Northern France held by mining company Rio Tinto Group to launch an approximately (€2 billion) $2.4 billion expansion into Europe, the company said in a statement Wednesday.
Aluminium content in vehicles manufactured on the continent in expected to rise by more than a quarter by 2024, with trends leaning towards lighter components to help lower carbon emissions. It believes thousands more jobs could be created at the 570-worker plant as it plans further investment into the site to create an global aluminium products hub to tap into the growing demand for aluminium particular from the automotive sector.
"Our detailed analysis leads us to believe that Dunkerque is the best location to drive forward our downstream automotive strategy", he said.
The group has also approached Rio to buy its Australasian aluminium smelting unit, sources say. "This will be our key strength when embarking on our ambitious plans", said Gupta.
Rio Tinto chief executive Alf Barrios said the offer is the best option for the future development of the site while also delivering value for Rio Tinto.
"We want to develop the plant into an worldwide centre of aluminium and downstream aluminium products expertise", Gupta said in the statement.
The proposal received from Liberty House, which acquired Rio Tinto's Lochaber Smelter and assets in Scotland in December 2016, includes plans for the modernisation of the site.
Mr Gupta is rumoured to be a potential buyer of Boyne Smelter Limited, Queensland Alumina Limited, Rio Tinto Yarwun and Gladstone Power Station.
"This is GFG's first significant step into continental Europe, which we will hope to build on".
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