South32 Buys Up to 25% Stake in Mozambique Smelter From MCA Metals

   By Stuart Condie 
 

SYDNEY--Diversified miner South32 Ltd. will increase its stake in Mozambique's Mozal Aluminium smelter with the purchase of an additional 25% stake from Mitsubishi Corp.'s MCA Metals Holding GmbH.

The Australia-based miner said it would match a headline purchase price of US$250 million to acquire MCA's interest, taking its stake to 72%. The move will increase its group-wide annualized equity share of aluminum production by 15% to 1.14 million metric tons.

South32 said its stake would rise to just 64% if the Industrial Development Corporation of South Africa exercises its entire pre-emptive rights based on its 24% holding in the project.

South32 will fund the acquisition from cash in hand. Its net cash balance at the end of August was US$553 million.

South32 said the transaction was priced at an acquisition Ebitda multiple of 3.6 times on a fiscal 2021 basis.

"We are pleased to be able to increase our shareholding on value accretive terms, with a transaction that we expect will deliver a strong return for our shareholders," Chief Executive Graham Kerr said.

Mr. Kerr said South32 was also investigating a restart of the smelter at Alumar in Brazil using renewable energy.

Write to Stuart Condie at [e-mail]

(END) Dow Jones Newswires

September 29, 2021 19:14 ET (23:14 GMT)

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