Chinalco and Rio Tinto Take Control of Brazil's CBA in $904 Million Deal

Chinalco (SHSE: 601600) and Rio Tinto (LSE: RIO) have launched a major move by purchasing a controlling stake in Companhia Brasileira de Aluminio (CBA) for roughly $904 million, reshaping control in one of Brazil's leading aluminum producers.

The acquisition includes 68.6% of CBA's shares - that's 446.6 million shares coming in at 10.50 reais each - bought from the Brazilian conglomerate Grupo Votorantim. This transaction not only shifts ownership but signals a strategic push by these industry giants into Brazil's integrated aluminum market.

Following Brazilian regulatory demands, Chinalco and Rio Tinto will carry out a mandatory tender offer for the remaining shares. This move could potentially lead to CBA's delisting from the São Paulo exchange (B3), effectively transitioning the company into private hands under their joint venture.

The joint venture setup assigns Chinalco's subsidiary the lion's share with a 67% stake, while Rio Tinto controls the remaining 33%. The partnership combines Chinalco's extensive alumina expertise with Rio Tinto's global mining prowess, setting the stage for enhanced operational integration.

CBA operates a vertically integrated, low-carbon aluminum production line - from bauxite mining to refining and smelting, ending with primary aluminum product manufacturing. This comprehensive footprint gives the new owners robust control over the supply chain and greener production capacity in a market increasingly attentive to sustainability.

Shares of CBA reacted modestly to the news, ticking up near 2%, reflecting cautious optimism from market participants. Meanwhile, the move adds further clustering to Hong Kong- and London-listed resources behemoths trying to secure critical materials for the evolving global economy.

For Rio Tinto, this deal adds another piece to its portfolio, particularly in expanding its reach into Latin American resources. Chinalco, often closely linked to China's strategic resource ambitions, gains a foothold in a key emerging market with CBA's established operations.

This $904 million investment highlights continued interest in aluminum amid rising demand for lightweight metals used in automotive and aerospace sectors, as well as packaging and construction. It also underscores how companies are aligning to control more integrated supply chains, especially those with a low-carbon edge.