First aluminium ‘mega-major’ about to be created – Executive management team already named

The creation of the new giant or ‘mega-major’ - as some analysts named it - in aluminium is at the gates. Following the approval of Australia, France and the European Union, there are practically no obstacles to the birth of Rio Tinto Alcan, the result of the takeover bid made some months ago by Rio Tinto for Alcan which has broken all previous records for bids made in the metallurgical and mining industry.
In fact Rio Tinto has placed 38.1 billion US dollars on the table, dashing Alcoa’s hopes to remain in the race for the acquisition. This big financial operation would be truly successful if the aluminium market proves to be strong also in the long term, a number of analysts indicate. The incredible bid from Rio Tinto was made at a time when the price of aluminium was been stable for some time at very high levels; it doubled between 2003 and mid- 2007, but the price for the metal fell on 18th of September to 2.376 $.
However, let us take a look at the figures involved in this huge operation, which will take Rio Tinto Alcan to the top of the list of world aluminium producers, with a production capacity of approximately 8 million t of alumina and more than 4 million t of primary aluminium Rio Tinto’s production capacity of almost 3 million t of alumina and of 850,000 t of primary aluminium will be completed with Alcan’s production capacity of more than 5 million t of alumina and of almost 3.5 million t of primary aluminium.
The newly-born Rio Tinto Alcan will hold the absolute leadership in primary business, followed by UC Rusal (3.7 million tpy) and Alcoa. It will go up to forth place for alumina production activities, after UC Rusal (10.6 million t), Alcoa and Chalco, but it will leap to the top after the expansions foreseen on the Australian plants in Yarwun (Rio Tinto) and in Gove (Alcan), with details to follow.
This leadership, concerning alumina-related activities, would have been overtaken by a tie-up between Alcoa and Alcan. If the bid of 33 billion US dollars made by the American group last May to Alumina had succeded, the Alcoa-Alcan axis would have had a production capacity of more than 21 million t.

Rio Tinto Alcan: new projects
These figures will rise even further if we examine the expansion programmes already launched by Rio Tinto and Alcan. The alumina plant in Yarwun, Australia, which belongs 100% to Rio Tinto, should increase from 1.4 million t to a production capacity of 3.4 million t by 2011, with an investment of 1.8 billion dollars.
Furthermore, Rio Tinto has signed an agreement with Cahya Mata Sarawak Berhad (CMS) for the development of a project for the construction of a smelter in the State of Sarawak, Malaysia. Sixty percent of the plant, which will be called Sarawak Tintoluminium Company (SALCO) will be owned by Rio Tinto. Production should commence in 2010 and its initial capacity will be 550,000 t with the possibility of increasing this to 1.5 million t.

Who will lead Rio Tinto Alcan
Executives of the new company have already been named. Rio Tinto and Alcan named on 10 October the executive management team drawn from leaders of both companies that will form the functional and operating structure of Rio Tinto Alcan and will be instrumental in the integration. The organization  is conditional, and will become effective, upon the completion of Rio Tinto's acquisition of Alcan Inc., expected in the fourth quarter of 2007.
These people will lead the newborn Rio Tinto Alcan, referring to Dick Evans, President and CEO of Alcan, who would head the new company:
Steve Hodgson: President & CEO, Bauxite and Alumina;
Jacynthe Cote: President & CEO, Primary Metal;
Christel Bories: President & CEO, Engineered Products.
Ilene Gordon: President & CEO, Packaging (until the completion of its planned divestiture, announced in July 2007);
The Rio Tinto Alcan executive staff functions of Finance, Human Resources and Communications & External Relations, will be led by:
Phillip Strachan, Finance;
Jean-Christophe Deslarzes, Human Resources;
Corey Copeland, Communications & External Relations.

Two additional functional leaders, Legal and Business Development, will be announced at a future date.

CLICH HERE to visualize the Alcan and Rio Tinto primary aluminium smelters worldwide and the Alcan and Rio Tinto alumina plants