Glencore purchases M.Rio Norte + Altunorte stakes

Glencore plc

Baar, Switzerland

27 April 2023

Glencore announces the acquisition of equity stakes in Mineracão Rio do Norte S.A. and Alunorte S.A. from Norsk Hydro ASA

Glencore is pleased to announce that it has reached a binding agreement with Norsk Hydro ASA ("Hydro"), one of the world's leading low-carbon aluminium companies, to acquire a 30% equity stake in Alunorte S.A. ("Alunorte") and a 45% equity stake in Mineracão Rio do Norte S.A. ("MRN") (the "Transaction").

Glencore is acquiring these non-controlling stakes for a combined equity value of c. USD 775 million, basis an agreed proportionate look through Enterprise Value and a net debt of USD 335 million in the business as at 31 March 2023. The transaction has an effective date of 30 June 2023 and includes certain post-closing adjustments, based on the performance of Alunorte over a 21-month period from 30 June 2023. The total payment on completion, including earn-in and other adjustments, is currently expected to be c. USD 700 million. Completion is expected to occur in H2 2023.

Completion of the Transaction is conditional on, among others, customary regulatory approvals and the two transactions with Hydro are inter-conditional.

On completion of the Transaction:

·    Glencore will become party to the Alunorte joint venture with Hydro and the other minority shareholders

·    Glencore will become party to the MRN joint venture with the other existing shareholders, being South32, Rio Tinto and Companhia Brasileira de Aluminio

·    Glencore will not be the operator of either asset

·    Glencore will have offtake rights for life of mine in respect of its pro rata share of the production from both Alunorte and MRN. Most of the bauxite purchased by Glencore from MRN will be supplied to Alunorte. In addition to the supply of MRN bauxite by Glencore, Alunorte currently purchases approximately 70% of its bauxite requirements from Paragominas, a bauxite mine wholly owned by Hydro

Robin Scheiner, Head of Alumina and Aluminium, Glencore, commented:

"The growing decarbonisation trend is driving demand not only for the mass production of batteries that require the raw materials which Glencore produces, but also for primary aluminium as a strong, lightweight manufacturing metal.

"The acquisition of the equity stakes in Alunorte and MRN provide Glencore with exposure to lower-quartile carbon alumina and bauxite, enhancing our capability to supply such critical material for the ongoing energy transition to our customers. Both Alunorte and MRN produce high quality products, which should support particularly our marketing activities across the Atlantic basin.

"We look forward to working with our joint venture partners to further strengthen Alunorte's position as a producer of low-carbon alumina."

Further information on Alunorte and MRN:

Alunorte:

·      Alunorte is the world's largest alumina refinery outside China, located in the city of Bacarena, state of Para in Brazil.

·      It began operations in 1995 and has c. 2,200 permanent employees.

·      It has a nameplate capacity and currently operating at c. 6.3m MT/year, and is looking to expand in the future.

·      It is ASI certified and the only refinery in the world to have obtained the ISO55001/2014 asset management certification, in addition to other ISO and SA certifications.

·      As well as being amongst the lowest cost refineries in the world, Alunorte is 1^st quartile with respect to carbon emissions with a clear plan to be 1^st decile by 2025, driven by a change in fuel consumption and the roll-out of electrical boilers.

MRN:

·      MRN is an open cast, high quality, low-cost bauxite mine located in Trombetas, Brazil.

·      Alunorte is one of the biggest consumers of MRN bauxite.

·      MRN has annual production capacity of c. 12.5 million metric tons of bauxite and nearly 1,300 permanent employees.

·      It is a leader in Brazil in sustainable mining and one of the largest socio-economic contributors in the region.

·      It began extracting bauxite in 1979.

·      It has an independent management team which reports into the board (which is itself comprised of shareholder representatives).

For further information please contact:

www.glencore.com

Glencore LEI: 2138002658CPO9NBH955

Notes for Editors

Glencore is one of the world's largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities that advance everyday life. Through a network of assets, customers and suppliers that spans the globe, we produce, process, recycle, source, market and distribute the commodities that support decarbonisation while meeting the energy needs of today.

With around 140,000 employees and contractors and a strong footprint in over 35 countries in both established and emerging regions for natural resources, our marketing and industrial activities are supported by a global network of more than 40 offices.

Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities.

Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative.

We recognise our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement by decarbonising our own operational footprint. We believe that we should take a holistic approach and have considered our commitment through the lens of our global industrial emissions. Against a 2019 baseline, we are committed to reducing our Scope 1, 2 and 3 industrial emissions by 15% by the end of 2026, 50% by the end of 2035 and we have an ambition to achieve net zero industrial emissions by the end of 2050. For more detail see our 2022 Climate Report on the publication page of our website at glencore.com/publications.

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Disclaimer
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, "Glencore", "Glencore group" and "Group" are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words "we", "us" and "our" are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.