Alcoa to Receive $1.1 Billion for Stake in Saudi Aluminum Ventures

Alcoa Corp. has agreed to a deal with Saudi Arabian Mining Co. (Maaden) that will see the US-based company receive $1.1 billion for its stake in two aluminum facilities in northern Saudi Arabia.

This transaction involves a mix of cash and stock, marking a significant step in Alcoa’s portfolio strategy.

Under the agreement, Maaden will fully acquire Alcoa’s interests in a bauxite mine and an aluminum smelter, with the deal valued at 563 million riyals ($150 million) in cash and 3.6 billion riyals in Maaden stock. Upon completion, Alcoa will retain a 2.2% ownership stake in Maaden.

William Oplinger, Alcoa’s CEO, emphasized that the transaction simplifies the company’s portfolio, enhances transparency regarding the value of its Saudi investments, and provides greater financial flexibility.

“The transaction simplifies our portfolio, enhances visibility in the value of our investment in Saudi Arabia and provides greater financial flexibility to Alcoa, an important part of improving our long-term competitiveness,” Oplinger said.

The joint venture between Alcoa and Maaden was established in 2009 to develop a comprehensive aluminum production complex in Saudi Arabia. This partnership was part of Saudi Arabia’s broader strategy to diversify its economy beyond oil and develop its natural resource sectors.

Maaden, which will now fully own the aluminum business, has become a key player in the Kingdom’s efforts to build a significant supply chain for metals and minerals, including those critical for the energy transition and electric vehicles. The company recently reported strong financial results, with a net profit increase of 160% in the first half of 2024 compared to the previous year.

Bob Wilt, CEO of Maaden, noted that this deal is a crucial step in streamlining operations and positioning the company for future growth.

“Streamlining the management structure of our aluminum business is a crucial step forward as we prepare for future growth and continue to build mining as the third pillar of the Saudi economy,” Wilt said.

The transaction is expected to close in the first half of 2025, pending regulatory and corporate approvals. Following the deal, Alcoa will hold about 2% of Maaden’s share capital. This move aligns with Alcoa’s strategy to focus on its core operations while maintaining a strategic interest in key partnerships.

With input from Bloomberg, Mining.com, Arab News.