Norsk Hydro has agreed to take over Rio Tinto Alcan’s 50% share of the Sør-Norge Aluminium (Søral) smelter in Norway, giving Hydro full ownership of the facility, it said on Thursday July 3.

Søral has a production capacity of about 180,000 tpy of primary metal, though it is producing half that since idling one of its two production lines in 2009.

“Søral is a well-invested plant, which on a comparable basis has a cost position in line with the rest of our Norwegian smelters,” Hilde Merete Aasheim, head of primary metal, said in a statement. “A change in ownership makes it possible to contribute even stronger in strengthening operations.”

Hydro’s ownership will mean a significant cost-saving for the smelter, which will now become a part of Hydro’s integrated, downstream-focused European aluminium business.

“Hydro already has a strong primary aluminium production base in Norway and we believe Søral will be a valuable contribution to our portfolio,” Aasheim said. “The plant fits well into Hydro’s high-premium casthouse product strategy.”

The transaction, which still needs approval from relevant competition authorities in Norway and France, is expected to close later this year. The fee was not disclosed.

Jethro Wookey
Twitter: @jethrowookey_mb