The Rio Tinto Iron and Titanium business includes this sprawling complex of seven plants in Sorel-Tracy, Que.Mathieu Dupuis/The Canadian Press
Rio Tinto Group RIO-N will seek offers for its metallurgical complex in Sorel-Tracy, Que., about five weeks after Group of Seven countries announced they would make an investment in the site to secure a North American supply of a rare metal called scandium.
The mining giant said during a meeting with analysts and investors in London Thursday that its strategic review of the Rio Tinto Iron and Titanium (RTIT) business, which includes the Sorel site, is advancing as planned and that the next step is testing the market for a sale.
The move is part of a wider effort by Rio Tinto’s new chief executive, Simon Trott, to “simplify” the corporation and sharpen its focus by cutting costs and offloading as much as US$10-billion of assets. He’s aiming to boost earnings 50 per cent from last year’s levels by 2030 by focusing on production in iron ore, copper, aluminum and lithium.
“When you try and do everything you get nothing done,” Mr. Trott said in his presentation. “So we’re redirecting our energy to where we can move the dial.”
Rio Tinto and Alcoa develop low-polluting method for aluminum production
RTIT operates a sprawling complex of seven factories in Sorel-Tracy that produce high-grade titanium dioxide among other products, which is used as a pigment to whiten things such as paint, textiles and paper. The business also includes mining and port operations in Havre-Saint-Pierre, Que., South Africa and Madagascar.
With financial backing from the Quebec government, Rio Tinto started producing scandium oxide at the Sorel-Tracy complex in 2022 through a process that extracts it from its waste streams. Considered a critical mineral by several countries including the United States and Canada, it’s a rare metal notably used to produce high-performance aluminum alloys for the aerospace and defence industries.
At an Oct. 31 meeting of G7 energy and environment ministers in Toronto, alliance partners announced they would make an array of investments in Canadian critical minerals projects, including Rio Tinto’s scandium operation. Rio Tinto’s scandium plant in Quebec is receiving a $25-million royalty investment from the Canada Growth Fund, and secured an offtake agreement from Ottawa that should help it move into full-scale production.
The financial infusions, which involve agreements to buy specific output volumes and set price floors, are aimed at countering China’s dominance over many of the metals needed for modern economies.
Hemlo Mining has high hopes for growth after $1-billion purchase from Barrick
Federal officials later confirmed that the Canadian government will start stockpiling scandium produced in the country as part of a new $2-billion push to finance critical mineral mines and processing plants and ease the anxiety being felt by Western nations over supply shortfalls. Montreal-based Nouveau Monde Graphite Inc.’s output is also in Ottawa’s sights.
That offtake agreement with the Canadian government could make RTIT a sweeter prize for interested suitors. The business employs about 1,500 people in Quebec overall.
Jérôme Pécresse, who leads Rio Tinto’s aluminum and lithium units and represents Canada on the company’s executive committee, said the complex should be attractive to potential buyers.
“The operation we have with the mine in Saint-Pierre and the plant in Sorel-Tracy are very important operations, not only because of their core business … but because of some of the critical minerals that we can extract from our product flow,” Mr. Pécresse said.
In June, U.S. President Donald Trump doubled the tariff on imports of aluminum to 50 per cent, which caused a shockwave among Quebec’s political and community leaders. The province is home to eight of Canada’s nine aluminum plants, including four wholly owned and operated by Rio Tinto, employing thousands of workers.
Six months later however, the fallout has been more manageable than first expected – at least among the big primary metal producers. Aluminum prices have increased and they’re now fully reflected in the Midwest Premium, the reference point for rates in the U.S. and Canada. But demand “remains very solid,” Mr. Pécresse said.
Earlier: Trump opens door to easing some steel and aluminum tariffs
While Rio Tinto still ships the vast majority of its Canadian aluminum output to the U.S., it has also found another outlet for its metal. The miner is now shipping 10 per cent to 20 per cent more into Europe from Canada than before, the executive said. “There are months where we think that it’s a more profitable trade for us.”
Rio Tinto executives also remain bullish on lithium as demand increases for stationary energy storage units and electric vehicles, but they’re pulling back on the speed of development of that resource amid uncertainty over supply conditions. The company last month mothballed a $2.3-billion lithium project in Serbia known as Jadar.
In Quebec, Rio Tinto owns a project called Galaxy that mines for spodumene, a lithium-bearing hard rock. It’s also the co-owner with the Quebec government of Nemaska Lithium, which has a separate spodumene mine deposit, as well as a processing plant in Bécancour slated to convert spodumene concentrate to lithium hydroxide, which is used for batteries.