Rio Tinto and Aluminum Corporation of China Limited (Chalco) entered into a definitive agreement to jointly acquire Votorantim’s 68.596% controlling share of Companhia Brasileira de Alumínio (CBA). Under the agreement, Rio Tinto will own 33% of shares and Chalco will own 67%.
“This acquisition, jointly with Chalco, of Votorantim’s controlling position in CBA’s fully integrated aluminum supply chain in Brazil is aligned with our strategy to deliver value for shareholders by extending our low-carbon, renewable-powered aluminium footprint in rapidly growing markets,” said Jérôme Pécresse, chief executive of Rio Tinto Aluminium & Lithium. “It also provides the opportunity to grow our bauxite and alumina supply chain in the Atlantic region.”
CBA is a vertically integrated low-carbon aluminum business in Brazil, supported by a 1.6 GW portfolio of renewable power generation assets, including 21 hydropower plants and wind power complexes. It primarily serves the growing domestic market, with competitive low-carbon products and operations powered by 100% renewable electricity.
CBA has three bauxite mines in production with current production of approximately 2 million tonnes of bauxite per annum, and an aluminum complex in São Paulo. The complex includes an 800,0000 tonne capacity alumina refinery, an approximately 400,000 tonne capacity aluminum smelter, 300,000 tonnes of secondary recycling capacity, and downstream processing facilities.
The transaction will leverage Rio Tinto and Chalco’s deep and complementary expertise across the aluminum value chain to unlock the next phase of growth at CBA. “Our partnership with Chalco brings together our combined operational excellence, innovation and unique project execution capabilities, unlocking the potential to create value for the benefit of our shareholders, as well as CBA’s employees, customers and local communities,” said Pécresse.
The transaction is subject to closing adjustments and the other terms of the transaction agreement, including satisfaction of regulatory approvals and customary closing conditions. Following closing, the joint venture will launch a mandatory tender offer for the remaining shares in CBA not held by Votorantim, as required by Brazilian law.