Norsk Hydro to invest 1.5 bln usd in CVRD-led Brazil alumina project

Norsk Hydro ASA said it is to invest 1.5 bln usd in a new alumina refinery project in Brazil, after signing a deal with Brazilian mining group Cia Vale do Rio Doce (CVRD). Norwegian aluminium group Hydro, which will hold a 20 pct share in the refinery, said the deal will strengthen its own future supply of alumina. The new refinery will be located close to Belem in the state of Para, only 5 km from Alunorte, the world's largest alumina refinery and which is already owned 57 pct by CVRD and 34 pct by Hydro. Hydro said the new plant is to be developed in four stages, each of 1.85 mln tons per year of alumina production, and with a final output of 7.4 mln tons per year. The first stage of the project is expected to cost Hydro approximately 1.5 bln usd, it said, but gave no details on the likely costs of the additional stages. The Norwegian firm said construction is expected to begin mid-2008, following an anticipated final build decision in the first quarter of next year. Production start-up is scheduled for the first half of 2011, it said, adding that the plan calls for a staged development of the remaining capacity increases. 'Participation in the new refinery project is an important element of Hydro's strategy to expand our global primary aluminium and raw materials production,' said chief executive Eivind Reiten. 'We will grow our upstream aluminium activities with a focus on alumina and primary aluminium, in parts of the world with access to natural resources on competitive terms.' Bauxite for the new refinery will be delivered by CVRD from its operation in Paragominas, in Para, through capacity in the existing bauxite slurry pipeline, currently partly supplying Alunorte. Only last week Hydro gave the final go-ahead to the construction of the Qatalum primary aluminium plant in Qatar, which will have an initial annual capacity of 585,000 tons of primary aluminium and reach full production in 2010. On top of the planned third expansion of Alunorte, Hydro said the latest deal will give it an equity coverage of more than 70 pct of its future alumina requirements.