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Drax’s interest in Alabama Pellets increases to 90%

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Drax has agreed to acquire a 20% minority interest in Alabama Pellets, the joint venture (JV) which owns the Demopolis and Aliceville pellet plants, increasing its total interest in the firm to 90%.

Drax will acquire the stake from The Westervelt Company for $29.7 million (€25 million) cash consideration. The move, expected to be completed in July, will increase its interest in Alabama Pellets to 90% and provide Drax with economic control over approximately 130,000 tonnes of additional biomass production capacity per annum.

The acquisition of Pinnacle Renewable Energy included a change of control provision over Alabama Pellets. Drax has been in discussions with Alabama Pellets’ JV partners regarding future working relationships, including their minority interests. The remaining JV partner, Two Rivers Lumber Co, holds a 10% economic interest.

Demopolis and Aliceville are located in Alabama close to the groups’ existing US operations and have a combined nameplate production capacity of 660,000 tonnes per annum. Aliceville was commissioned in 2018 and Demopolis is expected to be commissioned later this year.

Drax has 13 operational pellet plants (including Aliceville), plus satellite plant developments and Demopolis, with total nameplate production capacity of 4.9 million tonnes per annum once commissioned. The plants are sited in three major fibre baskets – British Columbia, Alberta, and the US Southeast – with access to four deep water ports providing routes to markets in Asia, Europe, and the UK.