The agreement is an extension of the exploration and trial drilling cooperation entered into on May 14 of this year. The progress since then has been positive, though further drilling and testing are necessary in order to determine the volume and quality of the deposits.
In the first phase of the new agreement, the obligation will be to finish the ongoing investigations that are planned for completion by the end of 2009 within a total cost framework of NOK 40 million. Hydro has undertaken to cover a relatively large share of the preliminary investigation costs.
The new agreement gives Hydro an ownership stake in the exploration rights and outlines the framework for the subsequent stages of a possible project. If commercially recoverable deposits can be confirmed, consideration will be given to setting up a mining company and an alumina refinery, which may then result in an investment decision.
A possible bauxite and alumina project in Australia is in line with Hydro’s strategy to increase the company's primary aluminium production and step up its production of alumina, the most important raw material for the production of aluminium.
The agreement was signed in Oslo on November 13 by the heads of the two companies, CEO Matthew Hogan of UMC and Hydro CEO Eivind Reiten.
- Hydro is a leading, global aluminium company with operations in every continent. Hydro owns and operates the Kurri Kurri aluminium metal plant in New South Wales, Australia, which had a production of 164,000 tonnes primary aluminium in 2006 and almost 500 employees. Hydro is also joint owner of the Tomago aluminium metal plant in the same state.
- United Minerals Corporation is an Australian publicly listed mining company with considerable bauxite rights in the Kimberley region and core operations within the diamonds, iron ore and bauxite sectors. UMC has at its disposal a number of already awarded, and some not finally awarded, exploration rights in the region.