Global commodities trader Trafigura entered exclusive negotiations with Egyptian Aluminium Company (Egyptalum) and Metallurgical Industries Holding Company (MIH) to develop a new primary aluminum smelter project in Egypt following the signing of a term sheet.
The parties plan to establish a new company to construct, own, and operate a 300,000 tons per year primary aluminum smelter and a 150,000 tons per year anode plant at Egyptalum’s Nag Hammadi complex. The project is expected to nearly double the site’s current aluminum production capacity.
Total investment cost for the project is estimated between USD 750 mln and USD 900 mln. Trafigura will participate as a minority equity investor, debt provider, and long-term offtake and feedstock supply partner.
The companies stated that the project aims to support global aluminum supply diversification amid historically low inventory levels outside China. The development is also expected to strengthen Egypt’s position in regional aluminum production and exports.
Trafigura has operated in Egypt for more than 20 years and supplies metals, alumina, and LNG to the country. The company recently expanded its investments in the aluminum sector through another smelter project under development in Indonesia.
Egyptalum is Egypt’s sole primary aluminum producer with an installed production capacity of around 320,000 tons per year at its Nag Hammadi complex in Upper Egypt. The company produces aluminum ingots, wire rods, billets, slabs, flat rolled products, and extrusion profiles.