OSLO, Norway, Sept. 30, 2002 (PRIMEZONE) -- The Board of Norsk Hydro (NYSE:NHY), the Norwegian-based Oil and Energy, Aluminium and Agri group, has decided to take part in expanding the Canadian primary aluminium plant, Alouette. The expansion of 307,000 tonnes will bring Alouette's capacity up to 550,000 tonnes per year. Hydro Aluminium holds a 20 percent share in Alouette, which represents 110,000 tonnes of post-expansion primary aluminium per year, up from 50,000 tonnes today.
Based on approval from Norsk Hydro and other plant shareholders, the Alouette owners committee today certified the go-ahead to expand. After expansion, Alouette will be among the world's lowest cost primary aluminium plants. The investment per tonne is favourable. Operating costs for increased capacity are estimated at less than USD 1,000 per tonne. This puts Alouette among the top 10 percent of low-cost smelter capacity in the world.
Total investment in Alouette will be CAD 1.41 billion -- 20 percent of which will be accounted for by Hydro. Including project reserves and financial costs, Hydro's investment share in Alouette is expected to be USD 243 million. The expansion project will start this fall and first production of aluminium is scheduled in February 2005.
Hydro acquired its share in Alouette through the acquisition of German company VAW earlier this year. Hydro Aluminium operates wholly owned primary aluminium plants in Norway, Germany and Australia. Hydro also has equity stakes in partly owned plants in Norway, Slovakia and Australia -- in addition to Alouette. Total capacity is now approximately 1.4 million tonnes per year. In addition, Hydro has a number of scrap remelt plants in Europe and the US, and together with third party metal sold through Hydro, this represents an additional 1.4 million tons of metal to market. Hydro Aluminium is presently expanding its Sunndal primary aluminium plant, which will be a highly efficient producer of primary aluminium and casthouse products when completed in December 2004.
Hydro Aluminium is currently Europe's largest integrated aluminium company, with strong growth in North America and attractive positions in the Asia-Pacific region's fast growing markets. Hydro Aluminium is among the top suppliers of aluminium extrusions, rolled and casted products. Hydro is also the world's largest supplier of extrusion ingots and a leader in other casthouse products such as primary foundry alloys and sheet ingot. It is also a leading supplier of high purity aluminium and magnesium alloys.
Hydro Aluminium's overseas smelters in Australia and Canada represent potential to further improve its global cost position. The decision to take part in the Alouette expansion is one way of realizing this potential. Alouette has the flexibility to serve both North America and Europe with metal.
The Alouette consortium consists of Alcan (40 percent), AMAG (20 percent), Hydro Aluminium (20 percent), SGF (13.33 percent) and Marubeni (6.67 percent).
Certain statements in this press release are or may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not in the nature of historical facts may be deemed to be forward-looking statements and may contain identifying words such as "believes," "anticipates," "plans," "expects" and similar expressions. These forward looking statements are based on Hydro's current expectations, assumptions, estimates and projections about the company and the industries in which it engages in business. All forward-looking statements involve risks and uncertainties. For a detailed description of factors that could cause Hydro's actual results to differ materially from those expressed in or implied by such statements, please refer to its annual report on Form 20-F for the year-ended December 31, 2001 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission.