Australian metals miner South32 increased its share in Mozambique’s Mozal Aluminium earlier this week, increasing its stake in the aluminium smelter to slightly over 72 percent.
South32 bought the additional 15 percent share from Mitsubishi subsidiary MCA Metals Holding for US$250 million. Remaining shareholders are the Industrial Development Corporation of South Africa, which holds 24 percent, and the government of Mozambique with 3.9 percent held via preference shares.
Graham Kerr, Chief Executive Officer of South32 explained the rationale for the move to industry media.
“The smelter benefits from access to hydroelectric power and key export markets into Europe. We have established a long operating track record at the Mozal Aluminium smelter in Mozambique over the past 20 years. During this time, we have formed strong relationships with our workforce, the community, the Mozambican government and other key stakeholders. The smelter benefits from access to hydroelectric power and key export markets into Europe. The smelter is an important customer for the alumina produced from our Worsley Alumina refinery and the transaction will further integrate that relationship in our supply chain.”
“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,” he concluded.
South32 noted that the deal was accretive, having an acquisition multiple of 3.6x FY21 EBITDA.
Based in Perth, Western Australia, South32 began in 2015 as a spin-off of BHP Billiton. The firm operates mines in Australia and South Africa, and markets aluminium, manganese, silver, zinc, lead, nickel, coking coal, and thermal coal.