OSLO, Norway, Oct. 9, 2015 (GLOBE NEWSWIRE) -- Hydro has signed a Letter of Intent (LoI) with Brazilian mining company Vale for the possible acquisition of Vale's 40 % interest in Brazilian bauxite producer Mineração Rio do Norte (MRN), which would strengthen Hydro's global position as a long player in bauxite and alumina.
An eventual agreement will depend on the parties agreeing terms for Hydro to acquire Vale's 40% interest in MRN, completion of Hydro's due diligence process, approval by the parties' Board of Directors and by the relevant competition authorities. The parties will also seek support from the other MRN shareholders to the transaction and will proceed in accordance with the terms of the shareholders' agreement. MRN's current shareholders are Vale (40%), Alcoa (18.2%), South 32 (14.8%), Rio Tinto (12%),CBA (10%) and Hydro (5%).
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 is a well-operated mining operation with a competitive cost position due to its high-quality bauxite, attractive strip ratio and economy-of-scale benefits through its 18-million-tonnes-per-year production. In addition to mining licenses covering a total 143,000 hectares, operations include mine infrastructure and equipment, the Porto Trombetas township, railway, stockyard, beneficiation plant, tailings disposal system, driers, port and power generation facilities.
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 percent 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
Contact Pål Kildemo
Cellular +47 97096711
Contact Halvor Molland
Cellular +47 92979797
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.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.