Hydro has teamed up with Glencore to sell a share of the Brazilian alumina refinery, Hydro Alunorte. This represents 30% of the business and the remaining 5% the company owns in MRN, the local bauxite producer.
Specifically, Glencore will have an additional 40% stake in MRN, currently owned by Vale. This 40% interest will be acquired by Hydro from Vale and sold immediately to Glencore on a back-to-back basis. Following the transactions, Hydro will no longer have an ownership position in MRN. Vale and Hydro reached an agreement regarding bauxite, which will allow Glencore to continue to supply approximately 30% of Alunorte’s long-term bauxite requirements from MRN.
Hydro’s CEO, Hilde Merete Aasheim, pointed out that this operation is a decisive step towards achieving its objectives. This operation is an important step towards fulfilling Hydro’s strategy. “The proceeds of the transaction will be used for strategic growth and distribution to shareholders. Alunorte remains a key strategic asset for Hydro and is a key source of low-carbon alumina supply for our primary aluminum smelters. Hydro will continue to be long on alumina, but now more balanced relative to demand from our aluminum smelter portfolio.”added the head of the company.
Hydro’s 2025 strategy, which unveiled its plans for the coming years, has a clear objective: to increase profitability and foster greater sustainability within its business. Part of the strategy has been to develop Alunorte, allocating capital to sustain and improve operations, and continuing efforts to strengthen the refinery’s position in the top quartile for cost and carbon emissions, as well as increasing community engagement.
“Our Bauxite and Alumina business area has made significant progress in recent years to reduce the footprint of alumina production, enabling Hydro to strengthen our position in low-carbon aluminum. We look forward to partnering with Glencore, and its extensive industrial expertise in metals and mining, to further develop Alunorte.”Aasheim added.
Hydro and Glencore will continue their efforts to reduce Alunorte’s carbon emissions through the fuel switch project, which aims to replace fuel oil with LNG, and the electrification of coal-fired boilers, placing Alunorte in the top decile of the global carbon curve by 2025 and positioning it as a leading supplier of low-carbon alumina. In addition to the decarbonization of Alunorte, the partners are committed to further developing social projects to improve the lives and livelihoods of nearby communities.
“This transaction is an important step in fulfilling Hydro’s strategy. The proceeds from the transaction will be used for strategic growth and distribution to shareholders. Alunorte remains a key strategic asset for Hydro and is a key source of low carbon alumina supply for our primary aluminum smelters. Hydro will continue to be long on alumina, but now more balanced in relation to demand from our portfolio of aluminum smelters.” reiterated Hydro’s President and CEO, Hilde Merete Aasheim.
Following these transactions, Hydro will remain Alunorte’s largest shareholder with 62%. Glencore will own 30% of Alunorte, while the remaining four minority shareholders will collectively own 8%.
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