Alcoa and Ignis Equity Move Toward Strategic Partnership for San Cibrao Operations

Alcoa Corporation and Ignis Equity Holdings, the majority shareholder of Ignis Business Group, a vertically integrated energy company, announced that they are moving toward signing a strategic cooperation agreement to support the continued operations of Alcoa's San Cibrao plant.

Under the proposed agreement, Alcoa would provide €75 million, while Ignis would make an initial investment of €25 million to finance operations. Alcoa would continue to manage the San Cibrao operation, with Ignis holding a 25% stake. Additionally, up to €100 million would be financed by Alcoa as needed for operations, with a priority position in future profits. If further financing is required, both partners must agree, with the investment covered 75% by Alcoa and 25% by Ignis.

Alcoa has faced challenges operating San Cibrao due to high energy costs. Earlier this year, the company began a sale process while seeking long-term solutions for the plant's viability. Despite consulting with 60 potential buyers, no viable bids were made for 100% of San Cibrao's operations. The partnership with Ignis emerged as a potential alternative for the Lugo plant, leveraging Alcoa's experience in managing aluminum operations globally alongside Ignis' expertise in energy markets.

The proposed agreement is conditional on the cooperation of the Government of Spain, the Xunta de Galicia, and the San Cibrao employees and works council in reaching agreements. These include increased support for indirect CO2 emissions cost offsets, expediting the processing and granting of permits for wind power projects, and approval of the red mud deposit (DBR) project. It also calls for flexibility within the current Viability Agreement.