Trafigura in talks to build aluminum smelter in Egypt

Staff Writer | May 6, 2026 | 

Contemporary large aluminum foundry with casting cells. Adobe Stock image.

Commodity trading giant Trafigura says it is in negotiations with the Egyptian Aluminium Company (Egyptalum) and the Metallurgical Industries Holding Company (MIH) to build a new aluminum smelter in Egypt.

Under a term sheet signed on Wednesday, the parties said they will look to establish a newly incorporated company that will construct, own and operate a 300,000-tonne-per-annum (tpa) primary aluminum smelter, alongside a 150,000-tpa anode plant, at Egyptalum’s Nag Hammadi complex.

Once built, the new facilities would nearly double the site’s current annual production capacity, Trafigura said.

$750-$900M investment

Trafigura will participate as a minority equity investor in the new company, as well as a debt provider and long-term offtake and feedstock supply counterparty. Total investment costs for the project are estimated at between $750-$900 million.

The new smelter would serve as an additional source of aluminum supply for an industry that has been rattled by the war in the Middle East. Strikes on key smelters in both the UAE and Bahrain have already crippled output in the Gulf region, which accounts for about 9% of the world’s supply.

While China has provided an alternative route for aluminum buyers globally, with its exports set to hit a record this year, most of its primary aluminum supply is still expected to remain within the domestic market due to Beijing’s existing tariffs.

As a result, available primary aluminum remains low. Trafigura estimates that over the past decade, the world outside China has drawn down 6 million tonnes of aluminum inventory, leaving stocks at historically low levels.

Against this backdrop, the new smelter will provide an important additional source of primary aluminum — supporting supply chain diversification and resilience across global markets, the firm said.

Longstanding relationship

The smelter project builds on Trafigura’s longstanding commercial relationship with Egypt, where the company has been present for over 20 years and is currently one of the largest suppliers into the country of metals — including alumina, which it has supplied since 2005 — and liquefied natural gas (LNG), it added.

“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 aluminum industry, and to have the support of the Egyptian government through MIH,” Gonzalo De Olazaval, Trafigura’s head of metals and minerals, said in a press release.

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

The term sheet follows Trafigura’s recent investment in a new smelter under development in Indonesia, underscoring the company’s strategy to secure long-term flows of metal to supply customers around the world.