Venezuela’s Ministry of Basic Industry and Mining has given state alumina producer CVG-Bauxilum the green light for a deal inked with Glencore worth $120 million, according to Guayana regional press reports and Bauxilum officials.

A first tranche of $42 million from Glencore is being readied and “should be here within a week,” Bauxilum labor leader Wilfredo Flores told El Correo del Caroni newspaper in a report published Tuesday 6th September.

The contract is for 2014-2018 and stipulates that Bauxilum must supply the Swiss-based trader with 1.4 million mt of alumina over the period.

“This is the third of this type of contract that we have signed with Glencore. However, we are still trying to obtain $80 million through BANDES (Venezuela’s National Development Bank). If that occurs then the terms of this contract will change,” said a Bauxilum official.

Bauxilum has seen its alumina production fall considerably in the past several years mainly due to a lack of economic resources to maintain and modernize equipment at the plant. The company produced 108,744 mt of alumina in July, down from 121,058 mt in July 2010 and up from 99,353 mt in June 2011, it said earlier this month. This compares to installed capacity of 2 million mt/year of alumina.

Bauxilum is part of the CVG’s 600,000 mt/year primary aluminum complex in Puerto Ordaz, Bolivar state.

(C) Platts Caracas