Glencore joins Alunorte, MRN joint ventures with Hydro after stake acquisition

Glencore joins Alunorte, MRN joint ventures with Hydro after stake acquisition

(IN BRIEF) Glencore has agreed to acquire a 30% stake in Alunorte and a 45% stake in Mineracão Rio do Norte from Norsk Hydro for a combined equity value of approximately USD 775 million. Completion of the transaction is expected to occur in H2 2023, subject to regulatory approval. Following the completion of the deal, Glencore will join the Alunorte and MRN joint ventures with Hydro and other minority shareholders, but will not operate either asset. The deal also grants Glencore offtake rights for the life of the mine in relation to its pro rata share of production from both Alunorte and MRN.

(PRESS RELEASE) BAAR, 27-Apr-2023 — /EuropaWire/ — Glencore (LON: GLEN), a Swiss multinational commodity trading and mining company, has announced that it has entered into a binding agreement with Norsk Hydro ASA (“Hydro”), a leading low-carbon aluminium company, to acquire a 30% equity stake in Alunorte S.A. (“Alunorte”) and a 45% equity stake in Mineracão Rio do Norte S.A. (“MRN”) in a transaction valued at around USD 775 million. The effective date of the transaction is 30 June 2023, and completion is expected to occur in the second half of 2023, subject to customary regulatory approvals.

As part of the agreement, Glencore will join the Alunorte and MRN joint ventures with Hydro and other minority shareholders, but will not be the operator of either asset. Glencore will also have offtake rights for the life of the mine in relation to its pro rata share of production from both Alunorte and MRN. Furthermore, most of the bauxite purchased by Glencore from MRN will be supplied to Alunorte, and Alunorte will continue to purchase approximately 70% of its bauxite requirements from Paragominas, a bauxite mine fully owned by Hydro.

The total payment on completion, including earn-in and other adjustments, is currently estimated to be approximately USD 700 million. The transaction includes certain post-closing adjustments based on the performance of Alunorte over a 21-month period from 30 June 2023.

The completion of the transaction is subject to certain conditions, including customary regulatory approvals and the inter-conditionality of the two transactions with Hydro.

Robin Scheiner, Head of Alumina and Aluminium, Glencore, commented:

“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. 

“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.

“We look forward to working with our joint venture partners to further strengthen Alunorte’s position as a producer of low-carbon alumina.”

Further information on Alunorte and MRN:

Alunorte is a leading alumina refinery located in Bacarena, Para, Brazil, with a nameplate capacity of around 6.3 million metric tons per year. Certified by ASI and ISO, Alunorte is recognized for its sustainability efforts and is among the lowest cost refineries in the world. It aims to be in the first decile for carbon emissions by 2025 by changing its fuel consumption and implementing electrical boilers. With 2,200 permanent employees, Alunorte is also the only refinery to have obtained the ISO55001/2014 asset management certification.

MRN is a high-quality, low-cost open-cast bauxite mine situated in Trombetas, Brazil. With an annual production capacity of approximately 12.5 million metric tons, MRN supplies bauxite to Alunorte, among others. The mine began operations in 1979 and has nearly 1,300 permanent employees. It is known for its sustainable mining practices and is a significant socio-economic contributor in the region. MRN has an independent management team that reports to the board, which is composed of shareholder representatives.

For further information please contact:

Investors

Martin Fewings
t: +41 41 709 28 80
m: +41 79 737 56 42
martin.fewings@glencore.com

Media

Charles Watenphul
t: +41 41 709 24 62
m: +41 79 904 33 20
charles.watenphul@glencore.com

Glencore LEI: 2138002658CPO9NBH955

Notes for Editors

Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities that advance everyday life. Through a network of assets, customers and suppliers that spans the globe, we produce, process, recycle, source, market and distribute the commodities that support decarbonisation while meeting the energy needs of today.

With around 140,000 employees and contractors and a strong footprint in over 35 countries in both established and emerging regions for natural resources, our marketing and industrial activities are supported by a global network of more than 40 offices.

Glencore’s customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities.

Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative.

We recognise our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement by decarbonising our own operational footprint. We believe that we should take a holistic approach and have considered our commitment through the lens of our global industrial emissions. Against a 2019 baseline, we are committed to reducing our Scope 1, 2 and 3 industrial emissions by 15% by the end of 2026, 50% by the end of 2035 and we have an ambition to achieve net zero industrial emissions by the end of 2050. For more detail see our 2022 Climate Report on the publication page of our website at glencore.com/publications.

Disclaimer
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, “Glencore”, “Glencore group” and “Group” are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words “we”, “us” and “our” are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

SOURCE: Glencore