Glencore secures stakes in Brazilian bauxite and alumina assets

News Analysis

4

Dec

2023

Glencore secures stakes in Brazilian bauxite and alumina assets

  • Jack Anderson

The deal sees the Swiss mining and trading giant boost aluminium feedstock self-sufficiency.

Glencore has completed a transaction to purchase a 30% equity stake in the Alunorte alumina refinery and a 45% equity stake in the Mineracão Rio do Norte (MRN) bauxite mining operation in Brazil. Norwegian aluminium producer Norsk Hydro (Hydro) reportedly sold its 30% stake in the Alunorte alumina refinery and a 5% stake in MRN to Glencore for a total of US$1.11Bn, together with Vale’s 40% stake in MRN. Glencore announced in late April that it had reached a binding agreement for the non-controlling stakes, which also means it secures offtake rights for life of mine relating to its pro rata share of production from both assets.

 

Alunorte is located in the city of Barcarena in the state of Pará in Brazil and is the world’s largest alumina refinery outside China. The plant has a nameplate capacity of 6.3Mtpy alumina, with plans to increase this further in the future. MRN is an open-cast bauxite mine located in Trombetas, Brazil and has an annual production capacity of approximately 12.5Mtpy bauxite of which the Alunorte refinery is one of the largest consumers.

 

Alumina is the major raw material used in primary aluminium production and is produced by the refining of bauxite. Glencore already owns Century Aluminum, which produces primary aluminium in the USA and Iceland. Given aluminium’s strategic significance, Glencore/Century Aluminum will be keen to reduce dependence on third-party feedstock by investing in upstream capacity. Glencore’s move comes at a time when Chinese aluminium producers continue to strengthen their dominance of the industry, accounting for a little under 60% of global primary supply last year according to International Aluminium Institute data. Aluminium’s key role in energy transition applications means that the metal has a strong outlook over the coming years. 



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