Press Metal seeks to secure alumina supply in RM739mil deal

This proposed acquisition via its 80%-owned subsidiary, Press Metal Bintulu Sdn Bhd will enable PMetal to access 5% of the annual production of WAP, which amounts to 230,000 tonnes of alumina p.a which is 15% of PMetal

KUALA LUMPUR: Press Metal Aluminium Bhd is buying a 50% stake in a company that holds a 10% interest in the Worsley Alumina project, as the local smelter seeks to secure long term access to the key raw material.

In a filing with Bursa Malaysia, the company said 80% owned subsidiary, Press Metal Bintulu Sdn Bhd has proposed to acquire 50% equity interest in Japan Alumina Associates (Australia) Pty Ltd (JAA) for A$250mil (RM739mil)

JAA holds 10% participation interest in the Worsley Alumina Unincorporated Joint Venture which owns and operates the Worsley Alumina Project, one of the world’s largest, longest life and lowest cost alumina producers.

This proposed acquisition will provide Press Metal the opportunity to access 5% of the annual production of the Worsley Alumina Project which amounts to 230,000 metric tonnes of alumina per annum.

“The acquisition is an effective approach towards ensuring Press Metal’s long term access to raw material and reduces its exposure and reliance on third party suppliers,” chief executive officer Tan Sri Paul Koon said in a statemment.

The proposed acquisition is expected to be completed by the first quarter of 2019.

The company said it is moving in to mitigate alumina price volatilities by securing the supply of certain volume of alumina obtained through JAA, instead of third parties.

"With this and our joint venture with Sunstone Development Co Ltd in China for the manufacturing of pre-baked carbon anodes (which is expected to be operational by year end), Press Metal has moved to gain direct access to the most essential raw material and consumable for aluminium production, being alumina and carbon anodes,” Koon said.