Alcoa is selling its 55 per cent interest in the Jamalco refinery to Noble Group Limited, the parties announced Wednesday morning.

The companies have signed a definitive agreement for Alcoa World Alumina and Chemicals (AWAC) to sell its entire holdings in Jamalco for US$140 million.

The deal values Jamalco at US$254.5 million (J$28.6 billion). The Jamaican government owns the other 45 per cent of the refinery through Clarendon Alumina Partners Limited. It appears that Jamaica will retain its interest in Jamalco, at least for now, which would be a pullback from plans to divest the holdings under the IMF agreement.

AWAC, whose joint venture interest was held through Alcoa Minerals of Jamaica, will be paid to manage the plant for another three years under a service agreement. Noble and Alcoa said jobs at the plant would be intact.

“This transaction will provide Noble with an additional 778,800 metric tons of annual alumina off-take while the Jamaican government retains its 45 per cent ownership of the joint venture,” said Mark Hansen, Head of the Metals Division at Noble Group.

“Noble looks forward to partnering with the Government of Jamaica to continue to build on Jamalco’s robust operating history, and implement an energy solution that will enhance the efficiency of the plant,” he said.

Alcoa says it will make a loss of US$80 million to US$100 million or seven to nine cents per share, on the disposal, which will be booked in its fourth quarter.

Goldman Sachs & Co was Noble Group’s adviser on the transaction.

business@gleanerjm.com