Varomet acquires Hydro's magnesium remelters

(July 23, 2007) Hydro has entered into an agreement to sell its magnesium remelters in Bottrop, Germany, and Xi'an, China, to Varomet Holdings Limited, a subsidiary of the Australian mining company Straits Resources.

OUT OF MAGNESIUM: Hydro will be completely out of the magnesium business after finalizing the sale of magnesium plants in Bottrop (pictured) and Xi'an.

The divestment concludes Hydro’s decision to withdraw from the magnesium business. Hydro’s large primary magnesium plant in Quebec, Canada, was closed in March. The sale will have a modest positive book effect.

The Varomet Group is a trading and investment holding company, wholly owned by Straits Resources, a listed Australian mining company focusing on copper, gold and coal bulk commodities. Varomet is a supplier, marketer and off-taker for a wide variety of commodities, including non-ferrous and specialty metals. The company has representative offices in 15 locations.

The operations acquired from Hydro will be part of a larger magnesium operation that includes GfE-MIR, a German subsidiary actively involved in the global distribution and marketing of magnesium alloys. Varomet also has a strategic alliance with Thermo Magnesium SA, a French company operating a magnesium recycling plant in Marignac, France. The company has ambitious plans for developing their magnesium operations as a strategic partner for the automotive industry.

The acquisition is subject to approval by Chinese and German authorities.