Key facts
- Rio Tinto is exiting its aluminum metal matrix composites (MMC) business.
- Cymat Technologies will assume Rio Tinto's commercial customers for MMC.
- Cymat will pay Rio Tinto $750 per metric ton of MMC sold or used, capped at $500,000 over five years.
- Rio Tinto's MMC material has been produced for over 40 years and is used in automotive and rail sectors.
- Cymat expects this acquisition to add $7.5M - $10M in annual revenue.
Rio Tinto has agreed to transfer its aluminum metal matrix composites (MMC) business customers to Canadian firm Cymat Technologies as part of a strategic exit from the sector. The deal, signed between Cymat and Rio Tinto Alcan, involves Cymat paying Rio Tinto $750 per metric ton of MMC sold or used over a five-year period, with a total cap of $500,000.
Rio Tinto has been manufacturing and selling its proprietary ceramic-infused aluminum material, primarily used in automotive and rail applications, for over 40 years. Its key customers include European brake disk manufacturers for commercial vehicles and trains. Cymat, which uses MMC as a primary input for its stabilized aluminum foam (SAF) products, views this acquisition as a strategic move to expand its business.
Cymat plans to establish MMC production capabilities at its Mississauga plant, leveraging existing expertise. The company anticipates this venture will add between $7.5 million and $10 million in annual revenue, with comparable or better margins than its current products. The transition is expected to be fully operational by early Q2 2027, with capital costs for equipment estimated between $2 million and $2.5 million, to be financed through various sources including equipment financing, grants, and cash on hand.