Thursday, September 3, 2009

Century Aluminum sells stake in joint venture

Century Aluminum Co. said Tuesday that the company completed the divestment of its stake in certain bauxite and alumina assets.

Century Aluminum ( CENX - news - people ) sold its half of Louisiana-based Gramercy Alumina LLC and Jamaica-based St. Ann Bauxite Ltd. to privately held Noranda Aluminum Holding Corp. The two companies jointly acquired Gramercy and St. Ann from Kaiser Aluminum ( KALU - news - people ) and Chemical Corp. in 2004. Noranda, based in Franklin, Tenn., now is the sole owner of Gramercy and St. Ann. Bauxite is the primary ore of aluminum.

In August, Century Aluminum said the transaction will increase its focus on the company's core aluminum smelting business and growth projects.

Gramercy owns and operates a 1.2 million metric ton per year alumina annual capacity alumina refinery located in Louisiana and St. Ann owns and operates a 4.8 million metric ton per year annual capacity bauxite mining operation in Jamaica. As a result of the economic downturn, Century Aluminum said that Gramercy and St. Ann have been producing at about 50 percent and 40 percent of their rated capacities since early 2009.

Last month, Noranda said Century had agreed to purchase alumina---the key ingredient in aluminum-- from Gramercy in 2009 and 2010.

Noranda CEO Layle K. Smith said in a statement the deal is "consistent with our vertical integration strategy and our continuing desire to have a secure strategic supply of alumina. We also believe owning 100 percent of these two operations represents an opportunity to enhance profitability as market pricing improves."

Shares of Monterey, Calif.-based Century Aluminum dropped 18 cents to $10.05 in morning trading.

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