Mercuria Energy Group Ltd. and Glencore Plc (LON: GLEN) are two of the firms exploring a deal for Venalum, Venezuela’s largest aluminum smelter, that could help revive production after years of decline.
The potential agreement comes as Venezuela struggles to rebuild an industrial sector hampered by economic turmoil, power shortages and years of underinvestment, Bloomberg News reported, citing people familiar with the talks.
The structure of any agreement remains unclear, but discussions with the Venezuelan government have included taking over operations at the smelter and securing access to the aluminum it produces, according to Bloomberg.
Venalum, located in Puerto Ordaz near hydroelectric power resources and bauxite reserves, has the capacity to produce about 430,000 metric tons of primary aluminum annually. A deal could help restore the facility as a major producer following years of power shortages, economic difficulties and under-investment.
Strategic foothold
Glencore has a history of dealings with Venezuela’s state-owned aluminum industry, including providing financing to producers. A new agreement would deepen its involvement as the US seeks greater influence over Venezuela and its mineral and oil resources.
Mercuria is said to be partnering with Heeney Capital, a private mining investment firm, on the potential transaction. The companies have previously worked together on deals in Venezuela to gain access to the country’s commodities and metals.
No agreement has been reached and the talks could still collapse, according to Bloomberg. Glencore, Mercuria, Heeney Capital and Venezuela’s Information Ministry did not comment.
(With files from Bloomberg News)
Source: https://www.mining.com/glencore-mercuria-compete-for-venezuela-aluminum-smelter-deal/
