Divesting Gramercy Alumina and St. Ann Bauxite

Posted by tjdetai on January 4th, 2016

Aluminum industry

* To transfer ownership stakes to Noranda Aluminum* Divesting Gramercy Alumina and St. Ann Bauxite* Century stock rises 4 pct NEW YORK, Aug 4 (Reuters) - Century Aluminum Co said on Tuesday it is divesting its stakes in a Louisiana alumina plant and a Jamaican bauxite mine, which are currently operating at 50-percent capacity or less.The Monterey, California-based company said the transaction will allow it to focus on its aluminum smelting business at a time when metal prices are beginning to rebound from an economic downturn that dried up demand, forced production cuts and sent prices diving.Century Aluminum stock rose 41 cents, or 4.24. percent, to .07 in morning trading on Nasdaq.Century Aluminum said it will transfer its 50-percent ownership of Gramercy Alumina LLC and St. Ann Bauxite Ltd to subsidiaries of privately-held Noranda Aluminum Holding Corp.Century will make "modest cash payments" to Louisiana-based Gramercy as part of the transaction, which is expected to close this month. A spokesman declined any further comment.Century said it will also enter into an agreement under which it will purchase alumina -- a raw material produced from bauxite and smelted into aluminum -- from Gramercy for a limited period. Century's aluminum smelter in Hawesville, Kentucky, receives all its alumina supplies from Gramercy."This transaction will increase our focus on Century's core aluminum smelting business and our attractive growth projects," said President and Chief Operating Officer Wayne Hale.

He said that current curtailments of aluminum production at its Ravenswood, West Virginia and Hawesville smelters have reduced alumina requirements."We have attractive contracts in place which will supply our alumina needs over the next several years," Hale said in a statement.Noranda, owned by affiliates of Apollo Management, L.P., said it has agreed to release Century from certain obligations. It did not elaborate."Our action to become the sole owner of the Gramercy alumina refinery and the St. Ann bauxite mining operations is consistent with our vertical integration strategy and our continuing desire to have a secure strategic supply of alumina," said President and Chief Executive Officer Layle "Kip" Smith.He said owning 100 percent of the two operations represented an opportunity "to enhance profitability as market pricing improves."Since the economic downturn last year, aluminum prices have tumbled from a peak of ,380 per tonne in July 2008. The metal was selling at around ,940 on the London Metal Exchange on Tuesday.

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tjdetai
Joined: June 29th, 2015
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