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In an announcement made this Thursday (27), Glencore disclosed that it negotiated the purchase of 45% of Mineração Rio do Norte (MRN), the largest producer and exporter of bauxite in Brazil.
The Swiss company acquired 40% stakes in Vale and 5% in Norsk Hydro, in two separate operations. With the acquisition, the Glencore becomes a partner in the Alunorte refinery in Pará, controlled by Hydro, which produces alumina from the bauxite supplied mainly by MRN. With this, the Swiss mining and trading company becomes the main shareholder of MRN, in a group that includes South32 (33%), Rio Tinto (12%) and CBA (10%).
The amount paid for the assets is expected to be US$ 700 million, when the operations are completed.
The acquisition of a shareholding in the Alunorte and MRN will give to Glencore the opportunity to be exposed to lower carbon alumina and bauxite, increasing its ability to supply this critical material for the ongoing energy transition to its customers, said Robin Scheiner, Head of Alumina and Aluminium, Glencore.
Vale, which originally owned 40% of MRN, will sell its rights to Ananke Alumina, an affiliate of Hydro, while Norsk Hydro's 5% in MRN will also be sold to Glencore.
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The deal is subject to regulatory approval.
"The divestment of bauxite producer marks the conclusion of our main divestment program, which involved the sale of more than 10 non-core assets across several continents since 2019. Through this program, Vale was able to simplify and reduce the risk exposure of its businesses, resulting in the elimination of expenses of up to US$ 2 billion per year”, said the Brazilian mining company.
Hydro, in turn, described the operation as an important step towards the continuation of the development of Alunorte's businesses.
“Alunorte remains a key strategic asset for Hydro and is an important source of low-carbon alumina for our primary aluminum smelters,” said Hilde Merete Aasheim, CEO of the company.
Considered the largest alumina refinery outside China, Alunorte has an annual nominal capacity of 6,3 million tons of alumina.
Company produces raw material for Hydro's aluminum operations around the world. This strategic move by companies in the mining market is part of a restructuring of their portfolios. The possibility of reducing costs and increasing the competitiveness of the sector are key points for negotiation between companies.
It is important to highlight that this negotiation is subject to a more detailed analysis by the regulatory authorities to ensure that the operation does not violate the regulation that protects competition.
A Glencore, in turn, expanded its business and will now have greater bauxite and alumina market share, essential products for the manufacture of aluminum, a sector that tends to grow and be increasingly requested by the industry, mainly due to environmental concerns and sustainability.
