Update: Century Aluminium pays US$1 to acquire a major part of Jamalco; Full transaction price is a mystery

In line with the report published last day that Century Aluminium agreed to buy a 55 per cent stake in Jamalco, the US-based primary aluminium producer signed a purchase contract with Noble Group Holdings Limited for US$1. The deal is expected to close by the end of April 2023, but the full transaction price is unknown.

This update was published after Century said in filings, “A wholly owned subsidiary of Century will acquire General Alumina Holdings Limited, a Noble subsidiary and owner of Noble’s 55 per cent interest in Jamalco, for US$1. The transaction is expected to close by the end of April 2023.”

Although the deal price is not explained, it implies the transaction may have cleared Noble of liabilities for Jamalco going forward.

The Hong Kong-based commodity trader Noble acquired a stake in Jamalco from Alcoa World Alumina and Chemicals for US$140 million in 2014, when the latter already booked a loss of US$100 million on the sale.

Jamalco’s remaining 45 per cent share is owned by the Government of Jamaica via Clarendon Alumina Production Limited.

Noble has been looking for prospective buyers for the refinery since 2022, which produces 1.4 million tonnes of alumina each year and has more than 900 employees.

Besides this, Noble has issued no additional information on the sale.

Noble’s current financial statements show a net loss of US$97 million in nine months ended September 2022, worsened from US$67 million of losses in 2021. A large part of this loss is credited to Jamalco for booking no revenue but still incurring expenses. Nevertheless, Noble received some compensation for its supply chain losses from insurance payouts.

Century Aluminium is neither a new player in the Jamaican market as it previously owned St Ann Bauxite Company but quit the investment a decade ago.

Century will use Jamalco's alumina to feed its own aluminium smelters upon completion of the deal. 

“This acquisition is highly strategic for Century as it secures a predictable, long-term supply of alumina, our most critical raw material and achieves increased transparency and control of our supply chain,” said Jesse Gary, president and CEO of Century in a joint statement with Jamalco about the deal.