Alcoa buys Alumina Ltd, takes over bauxite and aluminium assets

Alcoa Corporation has announced the completion of its acquisition of Alumina Limited, taking control of the AWAC joint venture whose assets comprise bauxite mines and alumina and aluminium refineries in Australia, Brazil, Spain, Saudi Arabia and Guinea.

The takeover increases Alcoa’s economic interest in its core business and simplifys governance by acquiring the minority partner in its AWAC JV, resulting in greater operational flexibility and strategic optionality, according to a statement.

Alcoa has two aluminium smelters in Victoria at Portland and Point Henry and operates three alumina refineries in Western Australia at Kwinana, Pinjarra and Wagerup which are fed by two bauxite mines.

Alcoa listed a commitment to Western Australia as one of three key pillars of the takeover.

The company said: “Alcoa operations in Western Australia are a key component of the company’s portfolio, and this acquisition deepens that commitment.”

However Alcoa made no similar commitment to its two Victorian smelters.

The Portland smelter is owned by n Alcoa of Australia (55%), CITIC (22.5%) and Marubeni Aluminium Australia (22.5%).

The Point Henry smelter (pictured) was owned by the AWAC joint venture, which was owned 60 percent by Alcoa and 40 percent by Alumina Ltd.

According to the company, the strategic move positions Alcoa to further strengthen its market leadership as a pure play, upstream aluminum company.

Alcoa’s President and CEO William F. Oplinger said: “The acquisition of Alumina Limited strengthens Alcoa’s position as one of the world’s largest bauxite and alumina producers and is expected to result in long-term value creation from greater financial and operational flexibility.

“I want to thank both the Alcoa and Alumina Limited teams, and our advisors, for full cooperation and diligence in closing this transformational transaction on a very tight schedule.”

In the transaction, Alumina shareholders received consideration of 0.02854 Alcoa shares for each Alumina share, implying an equity value of approximately $2.8 billion for Alumina.

Picture: Alcoa/Point Henry aluminium smelter