UPDATE - Norsk Hydro says to pull out of Indian alumina plan
Date: 18-Dec-01
Country: NORWAY
decision is based on an assessment of the future market for alumina, as well as the positive development of the company's alumina production facilities in Brazil," it said in a statement.
"The lack of progress for Utkal alumina is also part of the decision," it added. Utkal, conceived in the 1990s, has been racked by controversy over its environmental impact in India.
Utkal aims to be India's first export-oriented alumina unit with bauxite mining in the eastern Orissa state. It expects annual production of one million tonnes starting in 2005-2006, rising to three million in 2008-2009.
No construction has yet started. Hydro has a 45 percent stake in Utkal, ahead of Alcan Inc with 35 percent and Indian Aluminium Co with 20. Hydro's partners have first refusal in buying Hydro's stake.
Hydro said that it had started a legal process to quit the partnership.
"We're right at the start of the process," Hydro spokesman Thomas Knutzen told Reuters when asked if Hydro had identified any possible buyers or if the existing partners were interested in raising their stakes.
Knutzen said that Hydro's investments in the project so far were "very limited". He declined to give any exact amounts or say how much the 45 percent stake might be worth.
Hydro's statement said that it produces alumina in Jamaica and Brazil and that an expansion of the Brazilian Alunorte refinery would raise Hydro's production capacity for alumina.
In a response to criticism from environmentalists in Orissa state, Hydro said that "mining and industrialisation, when implemented in a careful and responsible way, may contribute to a sustainable development in this area". Hydro said that the project could give better conditions for thousands of people living below the poverty line.