Press Metal acquires 50pc stake in Australia-based Japan Alumina Associates for A$250m

Press Metal Aluminium Holdings Bhd, the largest aluminium smelter in Southeast Asia, is buying a 50 per cent stake in Japan Alumina Associates (Australia) Pty Ltd (JAA) for A$250 million (RM739 million).

JAA holds a 10 per cent stake in Worsley Alumina unincorporated joint venture which owns and operates the Worsley alumina project, one of the world’s largest, longest life and lowest cost alumina producers.

Chief executive officer Tan Sri Paul Koon said the proposed acquisition will provide Press Metal the opportunity to access five per cent of the annual production of the Worsley alumina project which amounts to 230,000 tonnes of alumina per annum.

The acquisition, which is expected to be completed by the first quarter of 2019, is an effective approach towards ensuring Press Metal’s long-term access to raw material and reduces its exposure and reliance on third party suppliers, he added.

“This acquisition forms part of our strategies to strengthen our operations vertically and to partially secure long-term supply of alumina for our smelting operations with expectations of cost savings.

“The Worsley Alumina Project, one of the lowest cost alumina producers in the world, represents a good entry into upstream alumina refinery for Press Metal. Through this proposed acquisition, Press Metal also stands to gain some industrial knowledge in the alumina refinery business,” he said in a statement.

Koon said it was moving in to mitigate alumina price volatilities by securing the supply of certain volume of alumina obtained through JAA, instead of third parties.

“With this and our joint venture with Sunstone Development Co Ltd in China for the manufacturing of pre-baked carbon anodes (which is expected to be operational by year end), Press Metal has moved to gain direct access to the most essential raw material and consumable for aluminium production, being alumina and carbon anodes,” he said.