Hydro will participate in the investment to increase alumina capacity at the highly competitive Alunorte refinery in Brazil. The expansion will raise annual capacity by more than 40 percent to approximately 6.5 million tonnes, making the refinery the largest and most modern in the world.
With a 34 percent ownership interest in Alunorte, Hydros share of the investment will be USD 288 million (NOK 1,865/EUR 239 million). After the expansion is complete, Hydros share of the alumina will reach 2.2 million tonnes on an annual basis.
The expansion will be the third at Alunorte since 2000, when Hydro acquired an interest in the refinery. The first was completed in 2003, and the second, bringing Alunorte to about 4.5 million tonnes, is scheduled to be completed during the second quarter of 2006.
Creating a natural continuation from the second to the third expansion will save costs and time. The expansion project will start immediately, and is expected to be completed in late 2008.
The expansion fits well with the plans for Hydros and Qatar Petroleums primary aluminium project in Qatar, which is designed to have annual production capacity of 570,000 tonnes starting in 2009.
The expected increase in primary aluminium production from 2009 requires increased alumina supply, and Alunorte will be one of the sources, says executive vice president Jon-Harald Nilsen, who is head of Hydros Aluminium business area.
This is an important step to improve our future competitive position. The Alunorte expansion is a highly competitive project, in terms of investment per tonne of new capacity. We are also very pleased with the operational performance in Alunorte, says Nilsen.
The Brazilian group Companhia Vale do Rio Doce (CVRD) owns 57 percent of Alunorte, with private Japanese and Brazilian companies holding the remaining 9 percent of the refinery.
The bauxite will be supplied by CVRD from its Paragominas mine in Brazil, and transported through a 230-kilometer pipeline to Alunorte, which is located near Belem in the state of Para.
Alunorte is considered one of the worlds leading alumina refineries in terms of health, environment and safety.