JBIC signs loan for Brazil's Alunorte alumina refinery expansion

The Japan Bank for International Cooperation has signed a loan agreement for up to $340 million with Alumina do Norte do Brasil, the proceeds of which will be applied to Alunorte's alumina refinery expansion project, JBIC said Wednesday.

Part of the alumina manufactured will be supplied to Albras, a Japan-Brazil aluminium smelting joint venture, and the aluminium ingot produced will be supplied to Japan, JBIC noted.

"The facility expansion under the project is expected to increase the stability of the alumina supply to Albras, thereby contributing to the stable supply of aluminium ingot to Japan," the bank said in a statement.

Japanese demand for new aluminium ingot is met almost entirely by imports--99% was imported in fiscal 2005, JBIC said, adding: "With prices of aluminium and other natural resources having jumped in recent years, securing access to aluminium has become a pressing issue with regard to Japanese industrial development."

In the first half of last year, stages 4 and 5 of Alunorte, the Brazilian state of Para, began operations, expanding refinery capacity by 1.9 million mt/year of alumina.

Investment in alumina refinery stages 6 and 7, which will add a further 1.9 million mt of capacity, will amount to $846 million, with a budget of $473 million for 2007. The completion of this project is scheduled for mid-2008, Brazilian miner CVRD said last month.

JBIC, the result of the merger between the Export-Import Bank of Japan and the Overseas Economic Cooperation Fund, was established in 1999. With its capital fully subscribed by the Japanese government, JBIC is the main institution responsible for Japan's official financing overseas.