Rusal will buy 30% of an alumina refinery in China – Kommersant

Rusal (MOEX: RUAL) agreed to purchase a 30% stake in the Chinese metallurgical company Hebei Wenfeng New Materials (HWNM), which owns an alumina refinery. The transaction amount was 1.911 billion yuan or $267 million, it follows from notifications companies on the Hong Kong Stock Exchange.

Yesterday, October 23, the parties signed an agreement on the transaction. The final payment may be adjusted based on HWNM’s working capital and indebtedness at closing, as well as “any outstanding or unsettled indemnity claims under the terms of the agreement.”

HWNM owns an alumina refinery in the Chinese province of Hebei, the annual capacity of the enterprise is 4.8 million tons. Rusal said RBCthat the agreement will help “provide access not only to a stable source of alumina at better prices, but also to the world’s best technologies and practices for alumina production and environmental protection.” The parties will divide the alumina produced in proportion to their shares in the capital. Rusal added that the deal will help strengthen the raw material security of the Russian aluminum industry, “reducing risks in the provision of critical raw materials.”

Over the past year, Rusal accounted for 5.6% of global aluminum production. Based on the results of the first half of the year, Rusal’s adjusted net profit according to IFRS decreased by 54.3%, to $315 million. Interfax citing sources reportedthat the company is considering closing several unprofitable plants.

Laura Keffer