The sale of Lochaber assets of Rio Tinto Aluminium: FOI release

Information requested

The areas I would appreciate any information held on are in relation to the sale of the Lochaber assets of Rio Tinto Aluminium (the Lochaber smelter, the two hydro-electric power stations and the associated Highland estate lands) to the GFG Alliance (including Liberty and SIMEC):

(1) Any risk assessment carried out in relation to the Scottish Government’s involvement in the transaction or guarantee, particularly in relation to state aid requirements.

(2) Any information on due diligence in relation to the transaction.

(3) Any advice in relation to state aid requirements provided to Ministers either from officials or any external organisations, including both internal and external legal counsel.

(4) Any information showing that other bidders involved had access to the guarantee made by the Scottish Government to GFG Alliance on the same, or potentially different terms.

(5) Any information on asset sales that have been approved by the Scottish Government or have otherwise been communicated to have taken place at any of the four sites, or as part of the business – or where consent was sought from the Scottish Government for asset sales but not progressed 

Response

The information held by the Scottish Government that falls within the scope of your request has been attached separately for your reference. While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because exemptions under FOISA apply. The details of these exemptions and why they apply are explained in the Annex to this letter.

Responses to your request can be found below:

(1) Any risk assessment carried out in relation to the Scottish Government’s involvement in the transaction or guarantee, particularly in relation to state aid requirements.

Q1 – While our aim is to provide information whenever possible, in this instance the costs of locating, retrieving and providing the information requested for this question would exceed the upper cost limit of £600. The reason for this is that, due to the broad scope of your request and the Scottish Government’s statutory obligation to respond accurately and compliantly, in order to locate and retrieve the requested information we would need to conduct a wide series of comprehensive searches of all of the records that the Scottish Government holds in attempts to find all information that would fall within scope.

Under section 12 of FOISA, public authorities are unable to comply with a request for information if the authority estimates that the cost of complying would exceed the upper cost limit. In this case, in order to locate, retrieve, prepare and provide any risk assessment carried out in relation to the Scottish Government’s involvement in the transaction or guarantee, particularly in relation to state aid requirements in relation to the sale of the Lochaber assets of Rio Tinto Aluminium (the Lochaber smelter, the two hydro-electric power stations and the associated Highland estate lands) to the GFG Alliance (including Liberty and SIMEC) would require an extensive search across a number of policy areas that would mean that costs would exceed the £600 statutory limit. We estimate that this would require searches and collation of data by several FOI caseworkers and policy colleagues from across the Scottish Government over several weeks and as such the costs would certainly rise above the statutory threshold. However, we can provide already published information which contains risk assessments and advice to Ministers around the guarantee: Gupta Family Group: documentation 2016 to 2020 - gov.scot (www.gov.scot).

(2) Any information on due diligence in relation to the transaction.

(3) Any advice in relation to state aid requirements provided to Ministers either from officials or any external organisations, including both internal and external legal counsel.

Qs 2-3 – The Scottish Government undertook appropriate due diligence prior to entering into the Lochaber Guarantee. This due diligence was undertaken by officials with support from external experts and covered a range of topics including risk, value for money and state-aid compliance. Whilst sections 30(c) and 36(1) exempt the Scottish Government from disclosing some of the information in relation to your request, we have already published extensive information on these topics that is available on the Scottish Government website. Due diligence linked to Lochaber guarantee: FOI release - gov.scot (www.gov.scot); Report prepared in relation to Project Golf: FOI review - gov.scot (www.gov.scot); Lochaber Smelter Guarantee Ministerial Submission: FOI Review - gov.scot (www.gov.scot). As such under section 27 of FOISA, we do not have to provide you information which is already available.

(4) Any information showing that other bidders involved had access to the guarantee made by the Scottish Government to GFG Alliance on the same, or potentially different terms.

Q4 – The sales process for the Lochaber assets was the responsibility of Rio Tinto Alcan and the Scottish Government worked very closely with Rio Tinto throughout 2016 to understand fully the commercial options for the site. The assets of the business, which included operations outside Scotland, attracted considerable buyer interest and the Scottish Government signalled a willingness to support any purchaser who would make the necessary commitment to the local community in relation to employment, industry and sustainable development. The offer included the potential to guarantee the power purchase obligations of the aluminium smelter, and this offer was communicated to all short-listed bidders with the full knowledge and support of Rio Tinto. The letters provided to bidders shortlisted by Rio Tinto are attached separately.

(5) Any information on asset sales that have been approved by the Scottish Government or have otherwise been communicated to have taken place at any of the four sites, or as part of the business – or where consent was sought from the Scottish Government for asset sales but not progressed 

Q5 – The Scottish Government’s securities are limited and do not cover all of the assets belonging to GFG Alliance companies in Lochaber. Further information on assets sales approved by the Scottish Government can be found attached separately.

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The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.

FOI 202200309183 - Information released

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