Rio Tinto Alcan (LON:RIO, NYSE:RTP, ASX:RIO) said it has invested an additional US$140 million in its aluminum smelter in Straumsvik, Iceland, bringing its total invesment in the ISAL smelter to US$487 million.
The company's funds will go towards a new casting facility to produce value-added billet aluminum. The announcement follows Rio Tinto's US$347 investment in the Straumsvik smelter last week to modernize and increase the smelter's capacity by 20%, following the completion of a long-term energy supply agreement with state-owned power utility company Landsvirkjun.
Rio Tinto said the investment will reinforce its market position in Northern Europe and demonstrates its long-term commitment to being a stable billet supplier. Billets are used in the auto, construction, aerospace and other industries.
"ISAL has a clean energy source in hydro power, low CO2 emissions and strong performance on health, safety and the environment. The investment will help us continue to deliver reliable and high quality products to our customers," said CEO Jacynthe Côté.
The aluminum producer also said it plans to consolidate the expertise and production for the slab products from ISAL with existing operations in France and the UK.
The ISAL smelter, which houses 480 pots in three potrooms, started up in 1969 and currently employs about 450 people. The smelter is expected to begin its gradual increase in production in April 2012 and is expected to complete the full 20% rise in production by 2014.
UK-based Rio Tinto is one of the world's largest mining companies with a market capitalisation of approximately $34 billion. Dual-listed in both London and Australia, the company produces many commodities, including aluminum, copper, diamonds, coal, uranium, gold, iron ore, and industrial minerals. It has operations in six continents, but are mainly focused in Australia and Canada.
The company acquired Canadian uranium company Alcan in 2007 for $38.1 billion.