en.Wedoany.com Reported - Canadian materials manufacturer Cymat Technologies Ltd. has signed a commercial agreement with Rio Tinto Alcan Inc. to transfer Rio Tinto's aluminum metal matrix composite (MMC) business customers to Cymat. The agreement aims to ensure a smooth transition of this business line.
MMC is a ceramic particle-infused aluminum primarily used in lightweight components requiring extreme wear resistance in the automotive and railway industries. Rio Tinto has produced and sold its own MMC for over 40 years but decided to exit the business due to strategic restructuring. Cymat uses this product as a key input material for producing stabilized aluminum foam (SAF), and its familiarity with the material qualifies it to take over this business line.
Cymat plans to establish MMC production capacity within its existing facility in Mississauga. Given the similarity in skill sets required for producing MMC and SAF, Cymat will leverage its existing expertise and engineering experience to manufacture MMC efficiently. Cymat has begun sourcing aluminum MMC from U.S. MMC producer MC21, which will assist Cymat in deploying state-of-the-art MMC production technologies and proprietary know-how, enabling it to produce a wider variety of MMC and serve a broader customer base.
Sales data provided by Rio Tinto indicates that Cymat could achieve incremental annual revenues of $7.5 million to $10 million. The agreement requires Cymat to pay Rio Tinto $750 per metric ton of MMC over five years, with a total cap of $500,000.
Rio Tinto's primary customers for this product are European brake disc manufacturers serving the heavy commercial vehicle and train markets. Under the EU's Euro 7 standards, the European Union mandates a reduction in harmful dust and debris generated by braking systems, with phased implementation starting as early as November 2026. Rio Tinto has received inquiries regarding the use of MMC as a potential alternative to cast iron discs, and these opportunities will also be transferred to Cymat.
The capital cost for Cymat to deploy state-of-the-art technology-related equipment is estimated at $2 million, which will be funded through a combination of equipment financing, potential federal and provincial grants, and cash reserves. Cymat expects the product line to be fully operational by the beginning of the second quarter of 2027. This new business line will bring three major benefits to Cymat: a predictable and potentially expandable revenue stream, reduced costs for key input materials, and the potential to customize MMC compositions to develop new types of SAF.
Michael Liik, CEO and Chairman of Cymat, stated that the agreement enables the company to expand its business using existing facilities and unique skills, and combined with sales growth in SAF applications in the nuclear, military, and construction sectors, will accelerate the path to profitability.
