Trafigura enters exclusive negotiations to develop a major aluminium smelter in Egypt

Trafigura Pte Ltd, a global supplier of commodities, has announced the commencement of exclusive negotiations with the Egyptian Aluminium Company (Egyptalum) and the Metallurgical Industries Holding Company (MIH) to develop a new primary aluminium smelter in Egypt. This follows the signing of a term sheet outlining the framework for the project.

Gonzalo De Olazaval, Head of Metals and Minerals, Trafigura, said, “A significant milestone has been reached with the signing of the term sheet and the start of exclusive negotiations. We are pleased to be working with Egyptalum, a counterparty with proven expertise in the aluminium industry, and to have the support of the Egyptian government through MIH.”

“By building on existing facilities, Egypt has the potential to become a major producer, and we look forward to supporting the country in realising that ambition,” he added.

Project overview: Expanding aluminium production capacity

The three parties intend to establish a newly incorporated company that will construct, own, and operate a primary aluminium smelter with an annual production capacity of 300,000 tonnes. 

Additionally, a 150,000 tonne per annum anode plant will be developed at Egyptalum’s existing Nag Hammadi complex. These new facilities are expected to nearly double the site’s current annual production capacity, significantly enhancing Egypt’s aluminium output.

Trafigura will participate as a minority equity investor in the new entity, while also providing debt financing and serving as a long-term offtake and feedstock supply partner. 

The total investment for the project is likely to be between USD 750 million and USD 900 million.

Perspectives from Egyptian partners

Eng. Mohamed Al Saadawi, Chairman of MIH, stated, “The signing of this term sheet is a powerful signal that Egypt’s industrial base continues to attract serious, long-term commitment from leading international private sector partners.”

“Trafigura’s decision to co-invest alongside a state-owned entity like Egyptalum demonstrates the confidence that global capital has in Egypt’s economic trajectory and the strength of our industrial platform. MIH is fully committed to supporting the success of this project, which represents one of the most significant industrial investments Egypt has seen in a generation.”

Dr Mahmoud Abdelaleem Agour, Chief Executive Officer at Egyptalum, said, “This term sheet marks a defining moment for Egypt Aluminium. By partnering with a global commodity leader of Trafigura’s calibre — as both a strategic investor and long-term offtake partner — we are laying the foundation for Egyptalum to emerge as a leading primary aluminium producer not only in Egypt but across the wider region.”

“The expansion at Nag Hammadi will nearly double our production capacity, generate significant export revenues, and create lasting value for our shareholders, our workforce, and the communities we serve. We look forward to progressing this partnership towards financial close.”

Strategic importance amid global aluminium market dynamics

Over the past decade, global aluminium inventories outside China have declined by approximately 6 million tonnes, reaching historically low levels. 

The new smelter will be a vital source of primary aluminium, helping to diversify and strengthen global supply chains.

The project emphasises the crucial role of downstream processing capabilities in the metals sector.

The signing of this term sheet follows Trafigura’s recent investment in a new aluminium smelter under development in Indonesia. This move shows Trafigura’s broader strategy to secure long-term metal supply flows to meet the needs of its global customer base.

Additionally, this initiative builds upon Trafigura’s longstanding commercial relationship with Egypt, where the company has operated for over 20 years. Trafigura is among the largest suppliers of metals to Egypt, including alumina, which it has supplied since 2005, as well as liquefied natural gas.