Trafigura has signed a term sheet with the Egyptian Aluminium Company (Egyptalum) and Metallurgical Industries Holding (MIH) to establish a new primary aluminium smelter.

The initiative includes the establishment of a company to oversee the development and operation of the smelter, which will have a capacity of 300,000 tonnes per annum (tpa), and an adjoining 150,000tpa anode plant at Egyptalum’s Nag Hammadi site.

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These facilities are expected to nearly double the location’s current annual production capacity.

Egyptalum CEO Mahmoud Abdelaleem Agour 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.”

Trafigura will serve as a minority equity investor, debt provider, and long-term offtake and feedstock supply partner.

The project’s total investment is estimated to range from $750m to $900m.

In the past decade, aluminium inventories outside China have decreased by six million tonnes, resulting in low stock levels.

The new smelter aims to provide an essential source of primary aluminium, enhancing global supply chain diversification and resilience, and highlighting the significance of downstream processing.

This initiative builds on Trafigura’s more than 20-year presence in Egypt, where it is a major supplier of metals including alumina as well as liquefied natural gas.

The signing of the term sheet follows Trafigura’s investment in a smelter project in Indonesia, aligning with its strategy to secure long-term metal supplies globally.

In March 2026, Trafigura signed a binding take-or-pay offtake agreement with Smackover Lithium to secure battery-grade lithium carbonate from the South West Arkansas project in the US.