CVRD and Hydro to Jointly Build a New Alumina Refinery in Brazil

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Researched by Industrial Info Resources (Sugar Land, Texas). On July 23, 2007, the Norwegian company Norsk Hydro (NYSE:NHY ) together with the Brazilian mining and metals CVDR (NYSE RIO: ) signed an agreement so as to develop a new alumina refinery in Brazil.

CVDR will hold an 80% stake of the project and Hydro the remaining 20%. The new plant, which is to be located in northern Brazil’s Para state near Alunorte, the world’s largest alumina refinery owned 57% by CVRD and 34% by Hydro, will be built in four different stages, each of which will increase production by 1.85 million tons per year. According to Norsk Hydro, Investment cost in the first stage for the total project has been estimated at $1.5 billion. Even though construction startup is still to be approved, both companies expect to begin construction approximately by the second quarter of 2008 and start adding production in the first half of 2011. Once the alumina plant is completed, it will have a total output of 7.4 million tons per year. The new alumina refinery’s necessary bauxite input is to be supplied by CVRD’s Paragominas mine through a 244 kilometers pipeline, which already sends that material to Alunorte alumina refinery.

According to Eivind Reiten, Hydro President and Chief Executive Officer, the agreement between Hydro and CVDR to develop the new alumina refinery in Brazil confirms the lasting partnership between both companies, which began in 2000 when Hydro acquired a strategic stake in Alunorte. Moreover, this initiative is also closely related to CVRD’s strategy to give priority to the bauxite and alumina production.

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