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Matt Lucke Buys Missouri Aluminum Smelter from Bankrupt Noranda for $13.7M

Matt Lucke Buys Missouri Aluminum Smelter from Bankrupt Noranda for $13.7M

Glencore plc (LSE: GLEN) (SEHK: 805) (JSE: GLN) top aluminum trader, who left Glencore after its merger with Xstrata a few months earlier. The court approval follows an auction that took place on September 28 with only two bidders. MFR II LLC, a company that specializes in industrial and commercial asset disposition and liquidation, submitted a slightly lower stalking horse bid for $13 million, according to S&P Global Platts. Noranda’s alumina refinery in Gramercy, Louisiana, and bauxite mining operation in St. Ann, Jamaica, were not included in the auction. With respect to its bauxite and alumina operations, Noranda, based in Franklin, Tennessee, continues to explore strategic alternatives, including discussions with potential acquirers, it said. Noranda filed for Chapter 11 bankruptcy in February as a result of a liquidity crisis, caused by declining global aluminum prices and the current commodities markets slump. The New Madrid smelter, idled since mid-March, has a production capacity of 263,000 metric tons of primary aluminum annually, at full capacity. It is fully integrated with its own raw material unloading facility, environmental control systems and aluminum reduction plant, including carbon anode fabrication. ARG officials reportedly did not visit New Madrid or the plant before purchasing it. “They kind of bid on it site unseen,” New Madrid city administrator Richard McGill told the Southeast Missourian. The plant site also includes a fabrication facility for the production of continuous cast rod, extrusion billet and foundry ingot. Formed in 1968, the smelter is located at a strategic mid-U.S. distribution point on the west bank of the Mississippi River, five miles south of the City of New Madrid in Southeast Missouri. The New Madrid smelter has been recently plagued with rising production costs due to increasing power rates from local electricity and gas utility Ameren Missouri. Noranda Aluminum, formerly Noranda Mines, was a mining and metallurgy company originally from Rouyn-Noranda, Quebec, Canada, founded in 1922. It was listed on the TSX under the symbol NRD.LV. After eventually acquiring a large interest in rival mining company Falconbridge, they merged in 2005. The combined company continued under the name Falconbridge Ltd until it was acquired by the Swiss-based mining company Xstrata (Schweiz) AG. In 2007, global private equity firm Apollo Global Management (NYSE: APO) acquired a portion of the aluminum business from Xstrata and renamed it Noranda. After taking the company public in 2010, Apollo remained Noranda’s largest shareholder with a 33% equity stake. In May 2015, Apollo sold all of its Noranda shares in a secondary public offering. ARC will be facing massive competition from global giants, including Century Aluminum Co. (NASDAQ: CENX), a U.S.-based producer of primary aluminium formed by Lucke’s former employer Glencore in 1995, with aluminum smelters in the US and Iceland. Century is the second-largest producer of primary aluminium in the U.S. after Alcoa Inc (NYSE: AA). A month ago, Zhongwang USA LLC, led by Chinese billionaire Liu Zhongtian, founder of China Zhongwang Holdings Ltd (HKEX: 01333), the world’s second largest industrial aluminum extrusion developer and manufacturer, agreed to acquire Cleveland, Ohio-based Aleris Corp., a global aluminum rolled products producer, for $2.33 billion. Since 2010, Aleris has been owned and controlled by private equity firms Oaktree Capital Management LP (NYSE: OAK), Apollo Management LP (NYSE: APO), and Sankaty Advisors LLC owning minority interests. In July, Russia’s leading aluminum producer United Co. Rusal (SEHK: 486; EN: RUSAL; MCX: RUAL/RUALR) agreed to sell a 100% stake of its Alumina Partners of Jamaica (Alpart) to Jiuquan Iron & Steel Co. Ltd., a Chinese state owned enterprise, for $299 million. Rusal’s chairman, president, and largest shareholder is Russian billionaire Oleg Deripaska, the founder and owner of Basic Element, one of the largest Russian industrial groups, and president of En+ Group. The former metals trader “came back from the brink of collapse, facing margin calls and billions of dollars in debt triggered by the 2008 financial crisis,” according to Forbes, and has a net worth recently valued at $3.3 billion.]]>

China Zhongwang to Acquire Aleris From $OAK, $APO in $2.33B Aluminum Deal

China Zhongwang to Acquire Aleris From $OAK, $APO in $2.33B Aluminum Deal

Reuters, adding that Zhongwang has been accused of evading U.S. import duties on extruded products, prompting an investigation by the U.S. Department of Commerce. “Auto manufacturers like Ford Motor Co have been moving toward aluminum, which is lighter than steel, to reduce body weight of autos in order to improve gasoline mileage, which will reduce emissions,” Reuters added. “We are excited about this transition to strategic ownership as it will allow us to accelerate our strategy to expand our capabilities to support the production of high-value advanced materials for the global automotive and aerospace markets, while maintaining our position as a leading supplier to critical regional markets like building and construction,” said Sean Stack, president and CEO of Aleris. “This acquisition is an international expansion to establish a complementary business foothold, as I strongly believe in the potential and prospects of Aleris and the aluminum industry as a whole,” said Liu Zhongtian, in a bet that the nascent U.S. automotive aluminum sector will be the industry’s next big growth market. “I believe Aleris is well-positioned to capitalize on the positive demand trends we see globally,” he added. The deal is expected to close in the first quarter of 2017, subject to customary regulatory approvals and closing conditions. Credit Suisse acted as financial advisor to Aleris. Fried, Frank, Harris, Shriver and Jacobson LLP acted as legal advisors. Moelis & Co. advised the Aleris Board on certain aspects of this transaction. Paul, Weiss, Wharton & Garrison LLP acted as legal advisors to Oaktree Capital Management. Photo: Liu Zhongtian, Chairman, China Zhongwang Holdings. (SCMP/Dickson Lee)]]>

Deripaska's Rusal Sells AlPart of Jamaica to China's Jiuquan for $299M

Deripaska's Rusal Sells AlPart of Jamaica to China's Jiuquan for $299M

Forbes, and currently has a net worth valued at $3.3 billion. Rusal is the world’s second largest aluminum company. It was the largest until overtaken by China Hongqiao Group in 2015. UC Rusal accounts for nearly 9% of the world’s primary aluminum output and 9% of the world’s alumina production. The United Company Rusal was formed through the merger of Rusal, Sual, and the alumina assets of Swiss-based Glencore, completed in March 2007. The company operates in 19 countries over five continents and employs over 72,000 people. UC Rusal is incorporated in Jersey, where it has its financial center, and is headquartered in Moscow. Alpart is a large production complex in Jamaica, which uses its own bauxite mines to feed alumina production. Before the shut-down of Alpart from 2009 to 2015, annual production capacity of the complex was 1.65 million tonnes of cell-grade alumina and 4.9 million tonnes of bauxite. Rusal acquired a 65% stake in Alpart in 2007 as part of its merger with the alumina assets of Glencore, and acquired the remaining 35% stake in 2011. “We are very pleased with the achieved agreement,” said Rusal’s CEO Vladislav Soloviev. “The deal is of financial interest for us, in that it does not affect the vertically integrated production chain of the company. Eusal’s production facilities both in Russia and abroad fully satisfy the company’s alumina demand while the company-owned bauxite resources ensure our plants’ performance for the next 100 years and more. The deal also strengthens our relationship with our Chinese partners, opening new opportunities for the future co-operation in other areas.” The deal was undertaken under Rusal’s assets optimization and debt ratio reduction program, the company said. The deal has been approved by Rusal’s board of directors. The deal is also subject to approvals by the Government of Jamaica and a number of state bodies in China. After the closing, Jiuquan will become one of the top 10 producers of aluminum in China. Jiuquan Iron & Steel Co. was established in 1958 as a large-scale iron and steel producer, the first one strategically located in the North-West of China. Its products include wires and rods, rolled steel plates, and bars, with a production capacity of 8 million tons of crude and rolled steel annually. The company also has other business divisions including aluminum, electricity, and engineering technical services. Photo: Oleg Deripaska, Chairman and President of UC Rusal.]]>