The reason for the delay relates to mining rights and regulatory approval processes in Brazil, which are taking longer than anticipated. The transaction involves the transfer of a large number of mining rights from Vale to the newly established Paragominas joint-venture company, in which Hydro will own 60 percent. Most of the transfers have been approved.
"We will not be able to close the transaction this year, as anticipated. We expect to get the necessary remaining approvals in time to finalize the transaction in the first half 2011," said Hydro CEO Svein Richard Brandtzæg.
"We are working closely with Vale to complete the transaction as soon as possible, and hope to finalize the outstanding issues earlier and close in the first quarter, if possible," Brandtzæg said.
“Vale and Hydro are working closely together to finalize the transaction as soon as possible, and we are confident that we will resolve all outstanding issues,” said Tito Martins, Executive Officer and Head of Basic Material Operations in Vale.
The delay is not expected to have significant impact on the value of the transaction for Hydro.
Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management’s plans, objectives and strategies for Hydro, such as planned expansions, investments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in Hydro’s markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, as well as (i) statements preceded by “expected”, “scheduled”, “targeted”, “planned”, “proposed”, “intended” or similar statements.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include, but are not limited to: our continued ability to reposition and restructure our upstream and downstream aluminium business; changes in availability and cost of energy and raw materials; global supply and demand for aluminium and aluminium products; world economic growth, including rates of inflation and industrial production; changes in the relative value of currencies and the value of commodity contracts; trends in Hydro’s key markets and competition; and legislative, regulatory and political factors.
No assurance can be given that such expectations will prove to have been correct. Hydro disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Published: December 14, 2010