MercoPress. South Atlantic News Agency

Vale Doce and Norsk Hydro expand Brazil's alumina pole

Norwegian aluminum group Norsk Hydro announced on Thursday that it will join with the Brazilian metals and mining company Vale Doce to build a new alumina refinery in northern Brazil, an investment totaling 2.6 billion US dollars.

The new refinery will be located near Alunorte, Vale's and Norsk Hydro's existing alumina refinery in the state of Para. The first phase of the project, scheduled to begin construction in October, will cost some 2.2 billion US dollars. Norsk Hydro's stake in the project is 20%. "To secure raw material for our aluminum production is a key element in Hydro's growth strategy," said Hydro President and CEO Eivind Reiten. "A stake in a major alumina refinery in this resource-rich area is a strategically important step in our aim for solid positions across the entire aluminum value chain," he added. Alunorte is the world's largest alumina refinery owned 57% by Vale and 34% by Hydro. The initial production capacity of the refinery will be 1.86 million tons per year of alumina. The new refinery has potential for future capacity expansions to reach up to 7.4 million tons per year. Bauxite for the new refinery will be delivered by Vale from its operation in Paragominas, in Para. Vale also said it plans to expand the Paragominas III bauxite mine to increase annual capacity from 9.9 million metric tons to 14.8 million. The project will cost an additional 487 million US dollars. Hydro and Vale in August officially opened the third expansion of Alunorte, bringing capacity at the refinery up to 6.3 million tons per year of alumina. Norsk Hydro, headquartered in Norway, is Europe's largest integrated aluminum company. The group has 24.700 employees in over 30 countries and reported revenue of approximately 17 billion US dollars.