Hydro divests its stake in Jamaican interests

Norsk Hydro ASA has signed an agreement to divest its 35 percent interest in the Jamaican bauxite and alumina partnership Alumina Partners of Jamaica (Alpart) to UC Rusal for a cash consideration of NOK 250 million (USD 46 million).

"Hydro acquired Vale's bauxite and alumina operations in Brazil earlier this year, including the word's largest alumina refinery and high-quality bauxite resources, considerably strengthening Hydro' position in the aluminium value chain. Following the acquisition, the 35 percent interest in Alpart is less strategic for Hydro," says Executive Vice President Johnny Undeli, responsible for the Bauxite & Alumina business area in Hydro.

The transaction is expected to be completed in October 2011, and a positive after-tax impact of about NOK 400 million is expected to be recognized in Hydro's Q3 2011 results.

The operations in the bauxite mines and the alumina refinery in Jamaica were curtailed in 2009 due to over-capacity in the alumina market. The plant is still curtailed.

Following the divestment of Alpart, Hydro will have ownership interests in the following bauxite and alumina assets, all located in Brazil:

• 60 percent in the Paragominas bauxite mine with annual capacity of 9.9 million tonnes, increasing to 100 percent ownership in 2015. A planned expansion to supply the CAP alumina refinery will increase Paragominas' capacity to 15 million tonnes.
  
  
• 5 percent in the MRN bauxite mine with annual capacity of 18 million tonnes, and volume off-take agreements for Vale's 40 percent ownership interest in the mine.
  
  
• 91 percent in the Alunorte alumina refinery with annual capacity of 6.3 million tonnes.
  
  
• 81 percent in the CAP alumina refinery project with initial annual capacity of 1.86 million tonnes and expansion potential up to 7.4 million tonnes.

In addition, Hydro has an alumina supply agreement in Australia with Rio Tinto lasting until 2030 for 0.5 million tonnes. The agreement allows for volume increases at different stages during the duration of the contract.

(Press release)

Monday, 19 September 2011 06:55