Hydro and Brazilian mining company Vale has ended negotiations on the possible acquisition of Vale’s 40 % interest in Brazilian bauxite producer Mineração Rio do Norte (MRN). The two companies entered into a letter of Intent (LoI) regarding the possible transaction in October 2015, but have not been able to agree on commercial terms.
Hydro will continue to own 5% of MRN, as well as to purchase bauxite from Vale under commercial agreements entered into in 2011.
Hydro acquired Vales' other Brazilian aluminium assets in 2011, including the 57 % interest in the Alunorte alumina refinery, the Paragominas bauxite mine, a 51 % interest in the Albras smelter, and their 61 % interest in the CAP alumina refinery project, all located in the state of Para. The 2011 agreement also included commercial agreements for Vale's bauxite offtake in MRN.
MRN is situated in the westernmost part of the state of Para, home to Hydro's other Brazilian operations, and is Brazil's, and one of the world's largest producers of bauxite. In operation since 1979, MRN currently employs around 1,400 employees and a significant number of contractors. MRN's current shareholders are Vale (40 %), Alcoa (18.2 %), South 32 (14. 8%), Rio Tinto (12 %), CBA (10 %) and Hydro (5 %).
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.