Norsk Hydro to Improve Al Business Cost Structure

Norsk Hydro of Norway decided to postpone construction for new alumina refinery project of Companhia de Alumina do Para’s (CAP) in Barcarena of Brazil. The CEO Svein Richard Brandtzag said the firm decided the suspension due to increasing uncertainty for short term aluminium supply balance and world economy. The firm also stops operation of Australian aluminium smelter, Kurri Kurri in September due to poor performance.

Mr. Brandtzag said to a reporter of Japan Metal Bulletin at telephone interview the firm has no schedule to resume construction CAP. Norsk Hydro controls 81% of the project with 19% share by Dubai Aluminium of United Arab Emirates. The project was to start operation with annual 1.86 million tonnes of output capacity in 2015 and to expand the capacity to finally 7.3 million tonnes.

Norsk Hydro launched program to improve operation efficiency at every smelter. Mr. Brandtzag said the firm targets US$ 35 per tonne of cost reduction in 2012 as a part of the US$ 300 of cost reduction target from 2009 to 2013, under which the firm realized US$ 200 of reduction by end 2011.

Mr. Brandtzag said aluminium smelting business experiences hard time due to higher expansion than the demand growth in years. The smelters suffer from higher energy and raw materials cost along with higher exchange rate in mineral rich countries as Australia. He said 20-30% of aluminium smelters in other countries than China apparently lose money.