Vancouver – Global Alumina (GLA.U-T) has struck a joint venture deal to sell two-thirds of a major alumina refinery project in the Republic of Guinea West Africa to an international consortium for US$260-million.
The move aims to improve the position of the company which is deemed by a special committee of its independent directors to be in serious financial difficulty, Global Alumina said.
Global Alumina is headquartered in Saint John, N.B., with operations in Boke, Guinea, and administrative offices in New York, London, Montreal and Conakry, Guinea
In a release after the close of trading on North American markets, March 26, the company said it had approved agreements to form a joint venture to develop and operate the proposed refinery project.
The company will sell two-thirds of the project to global mining giant BHP Billiton, (BHP-N, BLT-L, BHP-A) as well as Dubai Aluminium, and Mubadala Development Co., an investment firm owned by the Abu Dhabi government.
The US$260 million transaction fee is payable in four installments, indicating an equivalent to US$1.91 per outstanding share of the company, Global Alumina said.
The transaction will enable the company to continue developing the project under the investment and concession agreement with the Guinea government signed in 2004.
The joint venture to be established by these agreements is one of Global Alumina’s most exciting developments in its quest to construct the world’s largest green-field alumina refinery in Guinea,” said Bruce Wrobel, chief executive officer of Global Alumina.
Mr. Wrobel said the joint venture deal adds the financial and management resources of BHP Billiton, Dubal and Mubadala, as well as Dubal and Mubadala’s significant need for alumina driven by their aggressive aluminum smelter growth plans and BHP Billiton’s strong technical and operational expertise to Global Alumina’s project development team in Guinea.
Global Alumina, which reports in U.S. dollars, is trying to develop the bauxite resources of Guinea, a country with one-third of the world’s supply of the mineral, to produce alumina for sale to aluminum producers.
Alumina is a powdery substance used to smelt aluminum, a lightweight metal used in packaging, aerospace and other sectors.
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