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Secured alumina deliveries for Australian operations
 ALUMINA REFINERY: Comalco's Queensland Alumina Limited refinery at Gladstone, Queensland, Australia. (Photo: Comalco) |
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(June 13, 2003) Hydro Aluminium will secure alumina for its operations in Australia long term, without further investments in alumina production through a major contract with the Austrailan company Comalco.
According to the contract signed in Oslo on Friday, deliveries will start in 2005. That year Comalco will supply 300,000 tonnes from its plants Comalco Alumina Refinery and Queensland Alumina Refinery, both in Gladstone, Queensland. From 2006 and through 2030 they will supply 500,000 tonnes from the same plants.
The agreement also opens for volume increases at different stages during the contract duration. If Comalco decides to increases its capacities in Gladstone further, Hydro has an option to increase its purchases up to 20 per cent of these increases, up to one million tonnes per year..
In line with its alumina strategy, Hydro has during the last year pursued longterm contractual sourcing possibilities. The contract with Comalco confirms Hydro Aluminium's low investment alumina strategy to secure longterm supplies.
Alumina represents up to 40 per cent of total cash operating cost in primary aluminium production and focus on and control of this cost element is critical. The main objectives of Hydro Aluminium Primary Metal's alumina strategy are to secure a low cost supply and logistical system, with an acceptable security of supply and at the same time low investments in production.
With a primary aluminium production expected to grow from today's level of approximately 1.4 million tonnes, Hydro Aluminium needs approximately three mill. tonnes of alumina supplies annually to cover its equity production of metal. Approximately 45 per cent of this is covered through ownership in alumina refineries: Alunorte, Brazil (34%), Alpart, Jamaica (35%), AOS, Germany (50%). The rest is supplied through a portfolio of contracts.
In April this year, the Alunorte expansion was inaugurated, increasing Hydro's off-take from Alunorte to approximately 820,000 tonnes. The partners are considering a further expansion of the plant. Alunorte has the lowest conversion cost worldwide in the alumina industry.
Hydro Aluminium own and operate HA Kurri Kurri in New South Wales, Australia, a primary aluminium plant with a capacity of 150,000 tonnes per year. Hydro also holds a 12,4 per cent share in Tomago, a primary aluminium plant in New South Wales. Tomago has announced a program to increase capacity up to 530,000 tonnes per year from 2006.
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Hydro Aluminium is one of the top three integrated, global aluminium companies, and the leading aluminium company in Europe. Going forward, Hydro Aluminium will focus on leadership positions in key mid- and downstream areas. This includes a global leader role in aluminium cast house products, extrusion building systems, foil, litho, and selected automotive products.
Norsk Hydro is a leading Norway based industrial group, its core business areas being Hydro Oil & Energy, Hydro Agri and Hydro Aluminium. The group has more than 47,000 employees in nearly 60 countries. In 2002, operating revenues totalled more than EUR 22 billion.
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