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TORONTO (miningweekly.com) – NYSE-listed aluminium and specialty alloys manufacturer Alcoa on Wednesday announced that it would sell its stake in a bauxite mining and aluminium refining joint venture (JV) to raw materials trader Noble Group.
Alcoa said it had inked a definitive agreement that would result in Alcoa World Alumina and Chemicals (Awac) selling its stake in the Jamalco JV to Noble for $140-million. Awac would continue as the managing operator for three years under a compensated service agreement and employees would remain employed by Jamalco.
The Jamalco JV was 55% owned by Alcoa Minerals of Jamaica (AMJ) and 45%-owned by Clarendon Alumina Production (Cap). AMJ is part of the Awac JV, owned 60% by Alcoa and 40% by Alumina Limited. Cap is a Jamaica government-owned company.
“The decision to sell Awac’s stake in Jamalco is in line with Alcoa’s global strategy to reshape its upstream portfolio and lower the cost base of our commodity business. The sale will help achieve those goals, while maintaining jobs and protecting the economic contributions of Jamalco to Jamaica,” Alcoa Global Primary Products president Bob Wilt said in a statement.
Noble Group metals division head Mark Hansen added that the transaction would provide Noble with an extra 778 800 metric tons of yearly alumina offtake, while the Jamaican government would retain its 45% ownership of the JV.
The sale was subject to customary regulatory approvals and was expected to close by year-end.
Alcoa said it expected to record a noncash loss of about $80-million to $100-million, or between $0.07 and $0.09 a share, after-tax, in the fourth quarter as a result of the deal.
Goldman Sachs acted as a transaction adviser to Noble Group.