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(Kitco News) - Mining and natural resources group Glencore announced today that it has reached a binding agreement with Norsk Hydro, one of the world's leading low-carbon aluminium companies, to acquire a 30% equity stake in Alunorte and a 45% equity stake in Mineracão Rio do Norte (MRN), located in Brazil.
Alunorte is the world's largest alumina refinery outside China, located in the city of Bacarena, state of Para in Brazil. It began operations in 1995 and has c. 2,200 permanent employees. It has a nameplate capacity and currently operating at c. 6.3m MT/year, and is looking to expand in the future.
MRN is an open cast, high quality, low-cost bauxite mine located in Trombetas, Brazil. MRN has annual production capacity of c. 12.5 million metric tons of bauxite and nearly 1,300 permanent employees. Alunorte is one of the biggest consumers of MRN bauxite.
Glencore said it is acquiring non-controlling stakes in these assets for a combined equity value of c. USD 775 million, basis an agreed proportionate look through Enterprise Value and a net debt of USD 335 million in the business as at 31 March 2023.
According to a company statement, the transaction has an effective date of 30 June 2023 and includes certain post-closing adjustments, based on the performance of Alunorte over a 21-month period from 30 June 2023.
The total payment on completion, including earn-in and other adjustments, is currently expected to be c. USD 700 million, it added; completion is expected to occur in H2 2023.
Robin Scheiner, Head of Alumina and Aluminium, Glencore, commented, "The growing decarbonization trend is driving demand not only for the mass production of batteries that require the raw materials which Glencore produces, but also for primary aluminium as a strong, lightweight manufacturing metal.
"The acquisition of the equity stakes in Alunorte and MRN provide Glencore with exposure to lower-quartile carbon alumina and bauxite, enhancing our capability to supply such critical material for the ongoing energy transition to our customers. Both Alunorte and MRN produce high quality products, which should support particularly our marketing activities across the Atlantic basin."
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