Arctial aluminium plant in Finland targets first metal in H2 2029

LONDON, May 12 (Reuters) - The Rio Tinto-backed ​Arctial aluminium smelter in Finland, which could help to boost capacity in Europe, is targeting first hot metal production ​in ‌the second half of 2029, Arctial chief commercial officer Maxime Vandersmissen said on Tuesday.

The project, subject to ⁠a final investment decision in 2027, is more than three ⁠years away from the production ​stage but is in the spotlight already as the Iran war has tightened the availability of aluminium in import-dependent Europe.

Speaking at the CRU World Aluminium Conference in London, Vandersmissen said the project is ​targeting production ‌of 610,000 metric tons of aluminium per year.

"That's increasing European production levels by 20%," Vandersmissen said.

Europe produced 7.1 million tons in 2025, according to the International Aluminium Institute, an industry body. Its data includes Russia, where Rusal produced 3.9 million tons last year, leaving roughly 3.2 ​million tons for the rest of Europe.

Exports from the Gulf region, a key supplier of primary aluminium ‌and alloys to Europe, have been curbed after the Middle East conflict all but suspended bulk shipping through the Strait of Hormuz.

Reduced ‌supply from the Middle East, which accounts for 9% of global supply with its 7 million metric tons of annual capacity, led to a sharp rise in European aluminium premiums.

The physical ​premium European buyers pay above the LME price for primary aluminium, to cover freight, taxes and handling costs, is ‌at $599 a ton - up 67% since the U.S. and Israel started the war with Iran in late February.

In Rotterdam, the premium for aluminium extrusion billet over the benchmark price, according to ⁠Fastmarkets, has ⁠more than doubled to $1,152.5 a metric ton by Friday from ‌the pre-war level of $530.

Arctial would be the first primary aluminium development in continental Europe for over 30 years, although it ​will not be able ​to fully cover the European import needs.

For instance, Europe imported ‌around 1.2 million tons, or 20% of its primary and alloyed aluminium, from the Middle East and Egypt last year, according to information provider Trade Data Monitor. (Reporting by Tom Daly, Polina Devitt and Eric Onstad; Editing by Mark Potter and Emelia Sithole-Matarise)

Rio Tinto