RUSAL discloses completion of its HWNM stake purchase

Acquisition completion

RUSAL paid $264 million for a 30% interest in China’s Hebei Wenfeng New Materials Co. (HWNM), according to an Interfax report published on 29 August 2024 citing the company’s reporting. Ownership transferred in April 2024. The disclosed payment followed an earlier conditional price estimate, with arrangements to protect RUSAL’s interests included in the transaction.

The purchase valuation could change within a year of the transaction.
The company concluded put and call options.

The October 2023 agreement

RUSAL announced its agreement to buy the interest on 24 October 2023. The stated price was 1.911 billion yuan, approximately $267 million, subject to adjustments for HWNM’s working capital and debt at closing. The ceiling was 2.5 billion yuan. HWNM’s refinery in Hebei had capacity for 4.8 million tonnes of metallurgical alumina annually. RUSAL was to receive a proportionate share of production. At that announcement, completion depended on regulatory approval, corporate actions and lender consent. A shareholder agreement with HWNM’s controlling company was also envisaged to govern the relationship.

Prepayment disclosed in March 2024

The company’s reporting, described by Interfax on 15 March 2024, showed a prepayment of $13 million at the end of 2023, representing 5% of the estimated purchase price. Closing was then expected during 2024. In its discussion of raw-material supplies, RUSAL said purchases on external markets had restored continuity but raised costs. Loss of access to the Nikolaev refinery and Australian supplies in 2022 had affected sources representing about 40% of alumina consumption. Shipments from Ireland, where RUSAL owned the Aughinish refinery, were also restricted, according to the agency’s account.

A separate alumina investment plan

On 15 June 2023, RUSAL announced an agreement for an alumina production complex in the Leningrad region and port infrastructure at Ust-Luga. Planned investment was about 400 billion rubles across four process lines and related infrastructure. The first phase, with capacity up to 2.4 million tonnes annually, was scheduled by the end of 2028; a similarly sized second phase was planned for 2032. RUSAL intended to use bauxite from its operations in Guinea. The regional government offered organisational and regulatory support, and the project envisaged up to 7,500 new jobs.