Hindalco to buy refinery, bauxite assets in Brazil

Our Bureau Mumbai | Updated on January 18, 2013

Hindalco Industries is to acquire an alumina refinery and bauxite mines assets in Brazil from its group company Novelis Do Brasil Ltd, a wholly owned subsidiary of Novelis Inc.

To re-start facility

Work operations at the alumina refinery of 145,000 tonnes per annum at Ouro Preto in Brazil was suspended in 2009. It also has mining rights of over 50 million tonnes of bauxite reserves. With its wide experience in the aluminium business, Hindalco intends to re-start the facility after complete take over .

The alumina assets of Novelis Do Brasil will be transferred to a new company to be formed in Brazil. Hindalco will acquire the entire stake in the new company through its subsidiary, AV Minerals (Netherlands).

With its focus on mining and alumina business, the corporate re-organisation will allow the new company create value out of the moth-balled assets for all stakeholders, said Hindalco in a press release on Friday. Novelis Do Brasil will continue to focus on its core downstream aluminium rolling business, the company said. The deal will be completed after all necessary approvals and permits for re-starting the idle facilities and operations of the company from the Brazilian authorities.

Brazil operations

Novelis has three manufacturing units at Pindamonhangaba, Utinga and Ouro Preto in Brazil. The plant at Ouro Preto was the first to have the entire process — from extraction of bauxite to the production of primary aluminium. The unit produces primary aluminium in the form of plates and billets, Soderberg pulp mill and power generation plants.

The Pindamonhangaba facility underwent significant expansion to widen its competitive advantage in the Brazilian aluminium rolling activities. The unit focuses on the production of aluminium-rolled sheets to supply the packaging, automotive and civil construction segments. After expansion, the unit became the largest South American re-cycling centre with an 80,000 tonne per year re-cycling capacity.

Located in the industrial region, the Utinga facility in Santo Andre, Brazil, has over 50 years of history. The rolling mill supplies to the automotive and consumer goods segments.

Our Kolkata bureau adds

According to sources, the reo-rganisation also denoted intermingling of two different overseas metals verticals for Hindalco.

Through the Novelis vertical, Aditya Birla Group owns a number of aluminium assets in North and South America, including the plant located in Ouro Preto. Aditya Birla Minerals vertical so far has been engaged in copper mining in Australia.

The Hindalco stock reacted positively in the early session on the exchanges. The Re one shares finished marginally up at Rs 123 on the BSE with some 7 lakh shares changing hands.

Published on January 18, 2013

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