Russians take up last slice of Jamaica’s Alpart

(Jamaica Observer) UC Rusal has inked a deal to acquire the remaining 35 per cent stake in Alumina Partners of Jamaica (Alpart), giving it full ownership of the St Elizabeth-based refinery.

The agreement, which requires the US Rusal to pay Norsk Hydro a cash consideration of 250 million Norwegian kroner (J$3.96 billion), will also increase the Russian-based company’s ownership of Jamaica’s alumina assets to 64.2 per cent.

Norsk Hydro said the sale resulted from a strategic realignment of its assets.

“Hydro acquired Vale’s bauxite and alumina operations in Brazil earlier this year, including the word’s largest alumina refinery and high-quality bauxite resources, considerably strengthening Hydro’s position in the aluminium value chain,” said executive vice -president Johnny Undeli, who is responsible for the bauxite and alumina business area in Hydro. “Following the acquisition, the 35 per cent interest in Alpart is less strategic for Hydro.”

Alpart has a production capacity of around 1.65 million tonnes of alumina per year, while Windalco, which is 93 per cent owned by Rusal, has a capacity of 1.25 million tonnes. This means that the Rusal now has direct ownership of 64 per cent of Jamaica’s 4.3 million tonne capacity.

Rusal is also reportedly seeking to acquire a 45 per cent stake in Jamalco — a 1.425 million tonne alumina refinery based in Clarendon — from the Government, which has to divest it’s stake in the plant under its deal with the IMF. Should Rusal get the nod, it would end up with direct ownership of 78.9 per cent of Jamaica’s alumina assets.

UC Rusal first tried to enter the Jamaican market in 2004 when it bid on Kaiser Aluminium’s 65 per cent stake (which it now owns) in Alpart but missed the opportunity to buy it when Hydro, in May of that year, exercised its right of first refusal to buy the stake and agreed to sell it to Swiss-based metals trader Glencore.

However, in April 2007, RUSAL, SUAL, and the alumina assets of Glencore, were merged into United Company Rusal (UC Rusal) which gave Rusal (which owns 66 per cent of UC Rusal) Glencore’s stakes in both Alpart and Windalco and a 52.4 per cent share of Jamaica’s alumina production, by 2006 figures.

The operations in the bauxite mines and the alumina refinery at Alpart are still curtailed after closure in 2009 due to over-capacity in the alumina market, while just under half of Windalco production capacity is up and running.

The Government is still in negotiations with UC Rusal over the reopening of Windalco’s Kirkvine plant, while the divestment of Government’s stake in Jamalco is yet to be concluded.



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