Hebei Wenfeng New Materials (HWNM)

History

2023: Rusal bought a stake in HWNM

Rusal signed an agreement to buy a 30% stake in the Chinese metallurgical company Hebei Wenfeng New Materials (HWNM). This deal became known on October 24, 2023.

According to Reuters, the deal will cost 1.91 billion yuan, or $261.6 million. The final amount of payments can be adjusted depending on the working capital and debt of HWNM at the time of closing the transaction, as well as "any outstanding or unresolved claims for compensation for damage in accordance with the provisions of the agreement," follows from the notification of the Russian company on the Hong Kong Stock Exchange.

Rusal buys 30% stake in Hebei Wenfeng New Materials

The agreement between the Russian and Chinese companies will allow "to provide access not only to a stable source of alumina at more favorable prices, but also to the world's best technologies and practices for alumina production and environmental protection," RBC explained in Rusal. Partners will share alumina produced in China in proportion to equity interests, the report said. According to Reuters calculations, we are talking about 1.44 million tons of alumina - this will fill the shortage of raw materials from Rusal, which, according to the consulting Aladdiny, is about 1.4 million tons.

It is assumed that the Russian company will also be able to get "access to alumina at a competitive price" and provide its main supplies of raw materials. The company stressed that the deal will strengthen the raw material safety of the aluminum industry in Russia, "reducing risks in the field of providing critical raw materials."

HWNM was founded in 2020 and is part of the Chinese holding Hebei Wenfeng. It owns an alumina plant in Hebei province with a capacity of 4.8 million tons per year. From the statement of Russal, it follows that as a result of the transaction, the Russian company will receive "access to alumina at a competitive price" and will provide its main supplies of raw materials.^[1]

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