Hydro buys Rio Tinto Alcan stake in Soral plant

Aluminium producer Norsk Hydro will buy Rio Tinto Alcan's 50pc stake in a Norwegian primary aluminium smelter, giving Hydro full ownership of the plant.

The aluminium companies signed an agreement for Hydro to take Rio Tinto's 50pc share of the 180,000t/yr Sor-Norge Aluminium (Soral) primary aluminium smelter situated in Husnes on the Norwegian west coast. Terms were not disclosed.

One of the plant's two production lines was idled in 2009. The smelter currently produces around 90,000t/yr.

"Soral is a well-invested plant, which on a comparable basis has a cost position in line with the rest of our Norwegian smelters," Hydro executive vice president and head of primary metal Hilde Merete Aasheim said. "The plant fits well into Hydro's high-premium cast-house product strategy."

The close of the transaction is pending, including approval from competition authorities in Norway and France, and is expected in the second half of this year. Until the closing, Soral will still be governed by the current board of directors.

Hydro said in May that primary aluminium demand outside China is still exceeding production and with increased use of aluminium in cars and rising demand for recycled metal, the company hopes to expand its automotive and recycling capacity.

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