Overview of the Acquisition
Glencore PLC has successfully completed the acquisition of significant stakes in two key Brazilian assets, Alunorte SA and Mineracao Rio do Norte SA, from Norsk Hydro ASA. The deal, valued at USD 775 million, enhances Glencore’s position in the alumina and bauxite mining sectors.
Details of the Stake Purchase
The acquisition sees Glencore securing a 30% stake in Alunorte, a leading alumina refinery, and a 45% interest in Mineracao Rio do Norte, a prominent bauxite mining operation. The USD 775 million transaction is based on an agreed proportionate enterprise value, including a net debt of USD 335 million as of March 31.
Strategic Importance of Alunorte and Mineracao Rio do Norte
Alunorte is renowned for producing alumina from bauxite ore in Barcarena, Brazil. Mineracao Rio do Norte is strategically located as a significant bauxite miner in the region. These acquisitions position Glencore strongly in the alumina and bauxite industry.
Joint Venture and Operational Arrangements
Post-acquisition, Glencore enters into joint ventures with Norsk Hydro and other minority shareholders for Alunorte, and with South32 Ltd and Rio Tinto PLC for Mineracao Rio do Norte. Glencore will not operate either asset but will have offtake rights correlating to its pro rata share of production from both assets for their respective life of mine.
Glencore’s Perspective on the Acquisition
Robin Scheiner, Head of Alumina and Aluminium at Glencore, expressed enthusiasm about the partnership with the new joint venture partners and the management teams at these world-class assets. The acquisition marks a significant step in Glencore’s strategy in the alumina and aluminium sectors.
Market Response
Following the announcement, Glencore’s stock experienced a positive response in Johannesburg, reflecting a 0.5% increase, trading at ZAR 107.98. This reflects the market’s optimistic view of Glencore’s strategic expansion in the alumina and bauxite sectors. 
