Egypt signs $900 mln Trafigura deal to double aluminum production

Egypt signed an agreement with global commodities giant Trafigura Pte Ltd on Wednesday to expand the Nag Hammadi aluminum complex in a project valued at between $750 million and $900 million.

The expansion is expected to add 300,000 tons of annual production capacity, matching Egyptalum Company’s current output and bringing total capacity to about 600,000 tons a year.

Prime Minister Moustafa Madbouly, who attended the signing ceremony, said the deal is “part of Egypt’s strategy to deepen local manufacturing, strengthen key industries, and maximise returns on state assets through greater efficiency.” He added that the government aims to increase exports and modernise industrial operations through capacity expansion and technology upgrades in cooperation with the private sector.

Deputy Prime Minister Hussein Eissa said the project would help strengthen Egypt’s position in the global aluminum market while leveraging existing infrastructure to improve efficiency.

“The project is designed to attract value-added foreign direct investment and expand Egypt’s role in the global aluminium market,” Eissa said. He added that the Trafigura partnership would support the transfer of technical and commercial expertise and open new export channels for Egyptian products.

The agreement was signed by Mohamed El-Saadawi, chairman of the Metallurgical Industries Holding Company; Mahmoud Agour, executive managing director of Egyptalum; and Gonzalo de Olazábal, director of Trafigura.

The expansion will be carried out through a joint venture responsible for construction and operations, financed through a mix of equity and loans from international banks, Agour said.

Under the agreement, Trafigura is expected to supply key raw materials, including alumina, and support marketing through long-term contracts designed to ensure stable cash flows.

EFG Hermes is acting as financial adviser on the transaction.

“The project comes as global aluminium demand continues to outpace supply, with consumption rising by about 1.3 per cent annually over the past decade,” El-Saadawi said. He added that the market is expected to grow at annual rates of 2.1 per cent in volume and 3.5 per cent in value, driven by demand from transport, electric vehicles, and packaging sectors.

According to a Cabinet statement, the project is expected to generate jobs, support economic development in Upper Egypt, and increase foreign currency inflows through higher exports.

Attribution: Amwal Al Ghad English