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OSLO – Norwegian aluminium producer Norsk Hydro said on Thursday it will sell a 30% stake in Brazilian alumina refinery Alunorte and a 5% stake in bauxite producer Mineracao Rio do Norte to Swiss miner and trader Glencore.

Glencore expects to pay about $700-million for the equity stakes on completion of the deal in the second half of 2023, it said in a separate statement, which will give the miner and trader an offtake of the metal of proportionate value.

Hydro’s share price rose 3.7% by 0742 GMT, while Glencore’s stock was unchanged from the previous session.

The transaction value is based on a total net enterprise value of $1.11-billion, which will be adjusted for net debt of about $335-million, and the deal includes certain post-closing adjustments, the companies said.

“The growing decarbonisation trend is driving demand not only for the mass production of batteries that require the raw materials which Glencore produces, but also for primary aluminium as a strong, lightweight manufacturing metal,” said Robin Scheiner, head of alumina and aluminium at Glencore.

Norsk Hydro will use proceeds from the transaction for strategic growth and for shareholder distribution, CEO Hilde Merete Aasheim said.

Growing demand for metals needed for the green energy transition is fuelling a wave of mining industry buyout offers.

The Alunorte refinery, the largest of its kind outside China, transforms bauxite from mines into alumina, the key material used for making aluminium at smelters.

The plant can produce up to 6.3-million tonnes of alumina a year.

Hydro last year decided to invest 1.3-billion Brazilian reais ($258-million) to replace heavy fuel oil with natural gas at the refinery, aiming to cut its annual CO2 emissions by 700 000 t.

The fuel switch is expected to be finalised by the second half of this year.

After the transactions, Hydro will hold a 62% stake in Alunorte, Glencore 30% and the remaining four minority shareholders will jointly own 8%.