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“Upward trend for alumina market prices”

"The future price of bauxite and alumina should reflect the foundations of the production chain," said Executive Vice President Johnny Undeli at the Metal Bulletin Conference on Bauxite and Alumina held last week in Miami.

Undeli, responsible for Hydro's Alumina and Bauxite area, and several of his colleagues in the commercial area of Hydro participated for the first time in a major conference of the aluminum industry after the conclusion of the transaction with Vale.

The purchase of bauxite and alumina assets in Brazil made Hydro one of the main groups in the mining industry, and Undeli was one of the main speakers at the conference.

Change in pricing model

He indicated that Hydro would like to see a change in the pricing model for bauxite and alumina. Instead of the current model, which generally follows the price of aluminum on the London Metal Stock Exchange (LME), Undeli said that Hydro would prefer a model that mixes LME, pricing index and, broadly, the costs in the alumina and bauxite production chain.

Undeli emphasized that there will be an increasing struggle for cost-efficient resources and that Hydro, with its assets in Brazil, is well positioned. The company is now the fourth in the world in terms of the volume of alumina launched on the market. This position will be strengthened after the planned expansions in Brazil.

Future development of the industry

Johnny Undeli also emphasized that the alumina market is in consolidation and that Hydro plans to actively participate in the development of the industry.

He also presented Hydro's bauxite and alumina assets in Brazil.

“In the short term, our main objective is to guarantee the installed capacity of operations in Paragominas and Alunorte's alumina refinery,” said Undeli. “We will have a very strong focus on operational excellence and close collaboration with our thousands of employees in Pará.”

Increase in Production

“The first step is to increase the annual production of Alunorte, the world's largest alumina refinery, from 5.8 million tons in 2010 to 6.3 million, which is the nominal capacity of the factory. In Paragominas, one of the largest bauxite mines in the world, we see an urgent need to increase production from 7.5 million tonnes in 2010 to 10 million, ”said Undeli.

The executive said that in the long term Hydro will continue to develop plans for a future expansion of operations in Paragominas to 15 million tons / year and also the establishment of CAP's new alumina refinery in Barcarena.

This text is machine translated. To view the original Portuguese text, click on PT on the top right of this window

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