International energy, metals and industrials group, the GFG Alliance, announced today (Wednesday 23rd November) that two of its member companies – SIMEC and Liberty House – have reached agreement with Rio Tinto Aluminium to buy the iconic hydro-power and aluminium smelting operation at Lochaber near Fort William.
GFG’s acquisition of the high-profile Scottish Highlands installation will secure the jobs of more than 150 workers on site and hundreds more in the local and regional supply chain.
The transaction, which is expected to be completed in the next four weeks, will include: the hydro plants at Lochaber and neighbouring Kinlochleven, the Lochaber aluminium smelter and over one hundred thousand-acre estate which hosts the water catchment area, including the foothills of Ben Nevis, Britain’s highest mountain.
GFG’s energy business, SIMEC, will own and operate the hydro plants as part of its growing portfolio of renewable power assets in the UK, and the Liberty House Group will own and develop the aluminium business by integrating the smelters with the group’s downstream engineering and manufacturing activity in Scotland and beyond.
Total consideration of the transaction is UK£330 million, which is being funded with a mixture of equity and funds raised through a securitisation programme. The Group’s investment at Lochaber is being backed by the Scottish Government through a variety of business support mechanisms, in particular through support for a Liberty contract to purchase power from the hydro-electric plants.
Sanjeev Gupta, executive chairman of Liberty House Group and of the GFG Alliance strategic board, said: “This transaction fits very well with our vision to develop a sustainable and competitive metals industry in the UK as a key part of our global industrial business. 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 immensely grateful for the continuing support of the Scottish Government and for their far-sighted approach to industry.”
Jay Hambro, Chief Investment Officer of the GFG Alliance, and Chief Executive of SIMEC Energy & Mining Divisions said: “This is a significant boost to our renewables portfolio and will be another major step towards reducing our carbon footprint in metals production. We are looking forward to working with Rio Tinto over the coming weeks to complete this strategically important transaction. This is a very exciting acquisition opportunity for us and we have big ambitions for this site and for the development of green energy across the UK.”
Cabinet Secretary for Rural Economy and Connectivity, Fergus Ewing, said: “I am delighted at this news from Rio Tinto today. 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. I want to thank Rio Tinto for their positive engagement with Ministers and officials throughout the process and I will be sorry to see the company move out of Scotland after such a long association.
“With GFG Alliance, incorporating SIMEC and the Liberty House Group, as the successful bidder, I look forward to an exciting new chapter in the history of the Lochaber complex, with the UK’s last remaining aluminium smelter at Fort William continuing as a key component of Scotland’s industrial capability and a major source of employment in the Highlands and Islands. We have built up excellent working relations with Liberty House in our successful dealings in Dalzell and Clydebridge. Now a new exciting chapter of industrial development is set to begin.”
News of the agreement on Lochaber comes less than six weeks after Liberty reopened the steel plate mill at Dalzell near Glasgow, which had been mothballed by previous owners.