(Updates with share price, transaction details)
OSLO, April 27 (Reuters) - Norwegian aluminium producer
Norsk Hydro said on Thursday it will sell a 30% stake
in Brazilian alumina refinery Alunorte and a 5% stake in bauxite
producer Mineracao Rio do Norte to Swiss miner and trader
Glencore .
Glencore expects to pay about $700 million for the equity
stakes on completion of the deal in the second half of 2023, it
said in a separate statement, which will give the miner and
trader an offtake of the metal of proportionate value.
Hydro's share price rose 3.7% by 0742 GMT, while Glencore's
stock was unchanged from the previous session.
The transaction value is based on a total net enterprise
value of $1.11 billion, which will be adjusted for net debt of
about $335 million, and the deal includes certain post-closing
adjustments, the companies said.
"The growing decarbonisation 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," said
Robin Scheiner, head of alumina and aluminium at Glencore.
Norsk Hydro will use proceeds from the transaction for
strategic growth and for shareholder distribution, CEO Hilde
Merete Aasheim said.
Growing demand for metals needed for the green energy
transition is fuelling a wave of mining industry buyout offers.
The Alunorte refinery, the largest of its kind outside
China, transforms bauxite from mines into alumina, the key
material used for making aluminium at smelters.
The plant can produce up to 6.3 million tonnes of alumina a
year.
Hydro last year decided to invest 1.3 billion Brazilian
reais ($258 million) to replace heavy fuel oil with natural gas
at the refinery, aiming to cut its annual CO2 emissions by
700,000 tonnes.
The fuel switch is expected to be finalised by the second
half of this year.
After the transactions, Hydro will hold a 62% stake in
Alunorte, Glencore 30% and the remaining four minority
shareholders will jointly own 8%.
($1 = 5.0440 reais)
(Reporting by Victoria Klesty and Clara Denina; editing by
Terje Solsvik and Tomasz Janowski)
Messaging: victoria.klesty.thomsonreuters.com@reuters.net))
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