Rio Tinto, Chinalco clear hurdle in Brazil aluminum deal

Rio Tinto (ASX, LON, NYSE: RIO) and the Aluminum Corporation of China, known as Chinalco, cleared on Wednesday the final legal hurdle to go ahead with their joint acquisition of a controlling stake in aluminum maker Companhia Brasileira de Aluminio — CBA (BVMF: CBAV3).

Brazil’s antitrust watchdog CADE approved the transaction without restrictions, according to the country’s official gazette on Wednesday. The decision removes the last regulatory barrier to the deal announced in January, when the companies agreed to buy the stake from conglomerate Grupo Votorantim for 4.69 billion reais ($910 million) and launch a tender offer for the remaining CBA shares.

Rio Tinto and Chinalco will manage the investment through a joint venture controlled 67% by a Chinalco subsidiary and 33% by the Anglo-Australian miner. Chinalco already holds a 14.55% stake in Rio Tinto.

CBA operates a low-carbon, vertically integrated aluminium chain spanning bauxite mining, alumina refining and smelting, while also producing a range of primary aluminium products. The company owns 23 hydroelectric generators across Brazil and several wind farms that supply power to its smelting network, which produced 0.36 million tonnes of aluminium in 2024.

Shares of the Brazilian producer jumped on the approval news and have more than doubled over the past 12 months, lifting its market capitalization to about R$6.7 billion ($1.29 billion) as of Wednesday.

For Rio Tinto, the acquisition expands its footprint in low-carbon aluminium, a segment where the company already has a strong presence through hydropowered smelters in Canada. Rio produced 3.38 million tonnes of aluminium last year from facilities in Canada, NSW, Queensland, Tasmania and New Zealand.