Swiss commodities giant Glencore has completed the acquisition of a 30% stake in Norsk Hydro’s Hydro Alunorte alumina refinery in Brazil and its 5% stake in bauxite producer Mineracão Rio do Norte (MRN).
The deal, announced in April 2023, also included Vale’s 40% interest in MRN. This stake was first acquired by Hydro and immediately sold to Glencore on the condition that Hydro would not have an ownership position in MRN.
With the transaction now complete, Glencore has become the largest shareholder in MRN with a 45% holding. The remaining 55% interest is owned between South 32, Rio Tinto and CBA.
Hydro remains the largest shareholder in Alunorte, with a 62% stake. Glencore now owns a 30% stake in the refinery and the remaining 8% interest is held by four minority shareholders.
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In addition, Hydro has scrapped its supply agreements with Vale while Glencore will continue to deliver around 30% of Alunorte’s bauxite needs from MRN.
The deal value was adjusted by $244m for 30% of the net debt of Alunorte.
In a statement, Hydro said: “The enterprise value and net debt exclude asset retirement obligations of $40m on a 30% basis. The parties have agreed to a post-closing price adjustment based on the financial performance of Alunorte and Hydro expects to pay the full capped amount of $55m in Q1 2024.”
Both companies will carry out their efforts to support carbon savings at Alunorte through a fuel switch project. They plan to substitute fuel oil with liquified natural gas (LNG) along with electrification of boilers.
With this switch, Alunorte is expected to get onto the first decile on the global carbon curve in 2025 and become a top low-carbon alumina provider.
Norsk Hydro president and CEO Hilde Merete Aasheim said: “We are looking forward to working with Glencore to further develop Alunorte. Glencore has broad industrial experience within metals and mining, which adds to the significant progress our bauxite and alumina area has made in bringing down the footprint of alumina production. This enables Hydro to strengthen our position in low-carbon aluminium.”