24 Oct 2023 10:17

Rusal to buy 30% of Chinese alumina producer HWNM, securing 1.4 mln t of raw material per year

MOSCOW. Oct 24 (Interfax) - Rusal has agreed to acquire 30% of Chinese alumina producer Hebei Wenfeng New Materials Co. (HWNM) for CNY1.911 billion, or about $267 million, the Russian aluminum giant reported.

The transaction price may be adjusted depending on HWNM's working capital and debt as of closing and any outstanding or unsettled indemnification claim in accordance with the terms and conditions of the agreement as of closing, but is not expected to exceed CNY2.5 billion, or about $349.2 million, Rusal said.

The acquisition will give Rusal access to supplies of alumina at competitive prices, the company said.

HWNM owns an alumina refinery in Hebei Province with annual capacity to produce 4.8 million tonnes of metallurgical grade calcined alumina. Rusal will therefore be entitled to about 1.4 million tonnes of alumina from the refinery per year. Russia currently imports about 4.3 million tonnes of alumina.

The completion of the deal is subject to approval by the Chinese authorities, corporate actions and the consent of HWNM creditors. Rusal and Hebei Wenfeng Industrial Group Co., which controls HWNM, will sign a shareholder agreement.

Last year, Rusal lost access to the Nikolayev Alumina Refinery and alumina supplies from Australia, which together accounted for about 40% of the alumina the company uses. Rusal therefore started buying alumina in China, Kazakhstan and India.

In an effort to secure supplies and reduce costs, this year Rusal announced the construction of a new alumina refinery in Leningrad Region, the first phase of which will have capacity of up to 2.4 million tonnes per year. Rusal plans to ship bauxite from its operations in Guinea to the new plant.