Funtay/iStock via Getty Images

Funtay/iStock via Getty Images

Rio Tinto (NYSE:RIO ) said Wednesday it plans to spend C$240M (US$188M) to increase production capacity for low-carbon, high value aluminum billets at its Alma smelter in Quebec by 202K metric tons.

Rio Tinto (RIO) said it will expand the existing casting center at the Alma plant to accommodate new state-of-the-art equipment, including a casting pit and furnaces, allowing a larger portion of the aluminum produced to be converted to higher value billets.

Global demand for aluminum extrusion products is expected to grow at an average of ~3% annually over the next decade.

The company said construction will begin in May 2023, with commissioning expected in early 2025.

Rio Tinto (RIO) is debt-free and has a return on capital employed of 44%, Tudor Invest Holdings writes in a bullish analysis published on Seeking Alpha.