Today, Vale do Rio Doce Alumínio S.A (Aluvale) and Hydro Aluminium A.S (Hydro) implemented the participation of Hydro in Alunorte – Alumina do Norte do Brasil S.A (Alunorte), an alumina refinery located in the state of Pará, Brazil, through the acquisition of 25.25% of the voting shares of Alunorte.
This transaction is an important part of the financial and corporate restructuring of Alunorte, which has been an expressed objective for Companhia Vale do Rio Doce (“ CVRD”), the parent company of Aluvale, ever since privatization in 1997. For Hydro, this means the right to offtake approximately 380,000 tonnes of alumina per year which will improve Hydro’s position in alumina significantly.
Aluvale and Hydro also signed today a Letter of Intent to expand the capacity of Alunorte. The expansion aims to increase the capacity of Alunorte by approximately 50 per cent, from 1,500,000 up to 2,325,000 tonnes per year. The other shareholders in Alunorte may decide to participate in the expansion, but, in any event, Aluvale and Hydro have guaranteed to take up to 50 per cent each. The companies expect the physical work on this favourable brown-field expansion to start during this year.
In addition, and in order to meet Alunorte’s bauxite requirements, Aluvale and Hydro will supply an additional quantity of bauxite to Alunorte from Mineração Rio do Norte S.A (“MRN”), which owns a bauxite mine in the state of Pará, Brazil.
The transactions described above were part of a Memorandum of Understanding (MoU) executed by Aluvale and Hydro on 8 July 1999. These transactions could now be completed since all the precedent conditions of the MoU were fully implemented.
Joint Press Release for Aluvale and Hydro
Moreover, in November last year, Aluvale and Hydro signed a long-term sales and purchase agreement for a total of 1,000,000 tonnes of primary aluminium from Aluvale’s jointly owned smelter Albras – Alumínio Brasileiro S.A (“Albras”), which is located adjacent to Alunorte. The deliveries from this contract will start during the first quarter of this year.
Aluvale and Hydro are also currently discussing technical cooperation both in alumina production, aluminium reduction and carbon. This cooperation would include the Albras smelter and Hydro’s aluminium metal plants in Norway, as well as the Alunorte refinery and Hydro’s partly owned refinery in Jamaica, Alpart.
Aluvale is a 100 per cent owned subsidiary of Companhia Vale Rio Doce (CVRD), the world’s largest producer and exporter of iron ore. CVRD’s integrated aluminum operations rank among the largest in Latin America in terms of volume. Other Aluvale activities are majority shareholdings in the primary aluminium producers Albras – Alumínio Brasileiro S.A (51 %) and Valesul Alumínio S.A (54.5 %), with a combined total primary aluminium capacity of 450,000 tonnes.
Hydro is a 100 per cent owned subsidiary of Norsk Hydro ASA which is Norway's largest industrial company with core activities in oil and energy, light metals and fertilizers. Hydro Aluminium Metal Products, the primary aluminium division of Norsk Hydro, is a leading supplier of aluminium casthouse products in Europe and in the USA, with a primary aluminium capacity of approximately 750,000 tonnes in its wholly and partly owned plants in Norway and Slovakia. In addition Hydro has long-term commercial arrangements with various partners in Europe and the USA.