Sanjeev Gupta adds $630m Rio Tinto smelter to assets list

Sanjeev Gupta’s spending spree has continued with a $634m offer for a Rio Tinto aluminium smelter in France.

GFG Alliance chairman Sanjeev Gupta. Picture: Aaron Francis.

The spending spree of British billionaire and “White Knight of Whyalla” Sanjeev Gupta has continued, with the industrialist making a $US500 million ($634m) offer for Rio Tinto’s Dunkerque aluminium smelter in France.

The bid from the Gupta-led GFG Alliance is a bet that the amount of aluminium used in the manufacture of European vehicles will rise substantially in the years ahead as part of the automotive industry’s efforts to reduce its carbon footprint. Mr Gupta’s Liberty House is already planning a substantial overhaul of the nuclear-powered Dunkerque that will leave the smelter capable of producing the sorts of downstream aluminium components needed by Europe’s carmakers.

It is the latest in a long line of acquisitions by GFG Alliance and Liberty House Group, including last year’s acquisition of the Arrium assets including the Whyalla steel works and the recent purchase from Glencore of the Tahmoor coking coal mine in NSW.

For Rio, the looming sale of Dunkerque — which it picked up during the company’s costly Alcan acquisition of 2007 — will take the total amount reaped through asset sales since 2013 beyond $US8.4 billion.

Mr Gupta has been leading a frenzy of acquisitions in countries such as Britain, Australia and now France, which had suffered unfavourable reputations as being uncompetitive for manufacturing and downstream processing.

The Dunkerque purchase is the start of a broader entry into France, Mr Gupta declaring that the alliance planned to expand its presence in the country well beyond Dunkerque through a €2bn ($3bn) investment program.

“We are particularly attracted by the pro-business environment that President (Emmanuel) Macron’s France is quickly building,” Mr Gupta said.

“This has motivated our ambition to establish a global hub for the group in France, not only investing heavily in aluminium, steel and automotive, but also bringing our other divisions including energy, banking and property development to explore opportunities in France and Europe.”

Liberty House last year confirmed it was among a handful of bidders in the running to acquire the embattled Asco Industries, which owns steel mills across France. Liberty House was also behind the $US410m purchase of Rio’s Lochaber aluminium smelter in Scotland in 2016.

The total amount Liberty House and GFG Alliance have spent on their acquisitions is ­unclear, given the purchase prices have not been disclosed on many of the deals. But the groups have received funding support from private investors and GFG’s own bank, Wyelands Capital, and many of the deals have included support from local governments keen to hold on to industry.

Under French law, the Dunkerque sale will trigger a consultation process with the smelter’s employees and other stakeholders. Rio’s chief executive of aluminium, Alf Barrios, said he ­expected the sale to be completed by the second quarter.

“The binding offer for the sale of Aluminium Dunkerque represents the best option for the future development of the site while also delivering value for Rio Tinto as we continue to streamline our portfolio,” Mr Barrios said.

“Liberty House has a track record of investing in similar assets, which should secure a long-term sustainable future for Aluminium Dunkerque and continued economic benefit for the wider ­community.”