Each week, Power Technology’s writers select a deal that illustrates the themes driving change in our sector. The deal may not always be the largest in value, or the highest profile, but it will tell us where the industry is focusing its efforts, and why. This thematic deal coverage is drawn from GlobalData’s Intelligence Centre, which collates information from across the sector.
The deal
Iberdrola has announced the purchase of a 20% stake in Latem Aluminium. Iberdrola will invest €120m ($130.4m) in exchange for a 20% shareholding in the company. The investment will be channelled through Iberdrola’s start-up investment programme, Perseo.
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The parties
Iberdrola is a Spanish multinational energy company that focuses on generation, transmission and distribution. It operates power plants internationally that create energy from both renewable and fossil fuel sources. These include the 11,233MW Belo Monte plant in Brazil and the 3,000MW Marram offshore wind project in the UK.
Latem Aluminium is a Spanish company that focuses on aluminium recycling and “green” aluminium production. Using scrap aluminium as a raw material it provides ingots, liquid aluminium and rolled aluminium for industrial usage, with an aim to “close the aluminium cycle”. The company produces more than 30,000 tonnes of rolled aluminium per year across its two factory locations.
The implications
The investment into Latem Aluminium will allow Iberdrola to source rolled aluminium from a sustainable producer in line with the company’s aims to decarbonise.
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Iberdrola’s €120m will go towards the construction of a new, large-scale aluminium recycling project that it says will create 800 jobs. The 55,000m² building, which will only use scrap aluminium, received support from the regional government, which declared it a “priority industrial project”. It is aiming to produce a first load of aluminium by the first quarter of 2024. Furthermore, the pair has already entered negotiations to use aluminium produced by Latem in the construction of solar panel frames at Iberdrola’s upcoming photovoltaic panel plant.
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By GlobalDataThe deal between the two companies will also see the pair collaborate on decarbonising the aluminium production process. Iberdrola will supply renewable energy to Latem aluminium operations. Iberdrola stated: “The aluminium sector is an energy-intensive industry that consumes 1,300TWh [terawatt-hours] of energy per year and is responsible for 2% of global emissions. Key to its decarbonisation is the growth of recycled/secondary aluminium production such as the one Latem is going to carry out in this pioneering project.”
