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Hydro joins new alumina project in Brazil

Posted: 23 July 2007

Hydro and Brazilian mining company CVRD have signed an agreement to develop a new alumina refinery in northern Brazil, strengthening Hydro’s future alumina supply.

Hydro will hold a 20-percent share in the refinery.

The new refinery will be located close to Belém in the state of Para, approximately 5 km from Alunorte, the world’s largest alumina refinery, owned 57 percent by CVRD and 34 percent by Hydro. The new plant is to be developed in four stages, each of 1.85 mill tons per year of alumina production and with a final output of 7.4 mill tons per year.

“Participation in the new refinery project is an important element of Hydro’s strategy to expand our global primary aluminium and raw materials production,” said Hydro President and Chief Executive Officer Eivind Reiten.

“We will grow our upstream aluminium activities with a focus on alumina and primary aluminium, in parts of the world with access to natural resources on competitive terms.”

Investment cost in the first stage for the total project is preliminary estimated at USD 1.5 billion.

Construction is expected to begin mid 2008, following an anticipated final build decision in first quarter next year. Production start-up is scheduled for the first half of 2011, and the plan calls for a staged development of the remaining capacity increases. Hydro will have the right to participate with the same share in all future expansions.

Bauxite for the new refinery will be delivered by CVRD from its operation in Paragominas, in Para, through capacity in the existing bauxite slurry pipeline, currently partly supplying Alunorte.

Hydro recently announced the decision to go ahead with the construction of the Qatalum primary aluminium plant in Qatar which will have an initial annual capacity of 585,000 tons of primary aluminium and reach full production in 2010.

Hydro participates in the third expansion of Alunorte, which will reach total annual production capacity of approximately 6.5 million tons. This expansion, combined with a full ramp up of Qatalum, provides Hydro with an equity coverage in excess of 70 percent alumina.

The new alumina refinery in Brazil will be an important element in strengthening Hydro’s equity position and facilitates further expansion in primary aluminium, including the possible doubling of capacity in Qatalum.

“The agreement confirms the close and lasting partnership between Hydro and CVRD, which began in 2000 by Hydro acquiring a strategic stake in Alunorte. These steps we take to reposition Hydro’s aluminium and alumina portfolio will further strengthen our competitive position,” Reiten said.



Supported by:


Beach Petroleum

Horizon Oil

Saudi FAL