Noble to acquire Alcoa’s stake in Jamalco for $140m

It will provide an additional 778,800 metric tons of annual alumina off-take.

Alcoa, or the Aluminum Company of America, is focusing on its global strategy to reshape its upstream portfolio, and has decided that the sale of its ownership stake in Alcoa is in line with this strategy.

Alcoa and Noble today announced the signing of a definitive agreement that will result in Alcoa World Alumina and Chemicals (AWAC) selling 100 percent of its ownership stake in the Jamalco bauxite mining and alumina refining joint venture to Noble for $140 million. AWAC will continue as the managing operator for three years under a compensated service agreement and employees will remain employed by Jamalco.

The Jamaican government need not worry, as it still owns 45% of the Jamalco bauxite mining and alumina refining joint venture.

The Jamalco joint venture is 55 percent owned by Alcoa Minerals of Jamaica (AMJ) and 45 percent owned by Clarendon Alumina Production Ltd. (CAP). AMJ is part of the AWAC joint venture, owned 60 percent by Alcoa and 40 percent by Alumina Limited. CAP is a company wholly owned by the Government of Jamaica.

Here’s more from Noble:

This is consistent with Noble’s strategy to secure supply for customers while working with best in class operators such as Alcoa. Noble looks forward to partnering with the Government of Jamaica to continue to build on Jamalco’s robust operating history, and implement an energy solution that will enhance the efficiency of the plant.”

The sale is subject to customary regulatory approvals, and is expected to close by the end of the fourth quarter 2014. As a result of the transaction, Alcoa will record a non-cash loss of approximately $80 million to $100 million, or between $0.07 and $0.09 per share, after-tax and non-controlling interest in the fourth quarter. This sale is in line with Alcoa’s strategy to create a globally competitive commodity business.