OSLO -- Norway's Norsk Hydro ASA (NHY) Tuesday said it has signed a memorandum of understanding with Australia's United Minerals Corp. (UMC.AU) to explore the potential for bauxite mining and alumina refining in the Kimberley region of western Australia.
A final agreement between the Norwegian oil and aluminium firm and Australian mining company is expected to give Hydro a 75% holding in a potential bauxite and alumina project, in keeping with Hydro's strategy to increase its primary aluminum production, the company said.
It would also enable Hydro to raise its equity coverage of the key raw material alumina, it said.
Work to determine the extent of existing reserves and potential additional reserves in the Kimberly region is set to start in July and Hydro and UMC are set to begin talks with local authorities and key stakeholders.
Hydro already has assets in Australia, operating the Kurri Kurri primary aluminium pant in New South Wales which produced 164,000 metric tons of aluminium in 2006. The company also has a minority stake in Tomago primary aluminium plant in the same region.
Hydro supplied almost 3.6 million tons of primary aluminium metal in 2006, with 1.8 million tons originating from its 11 fully and part-owned primary aluminium units in Australia, Canada and Europe.
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