Alunorte Increases Alumina Production by 50% in 2006

Alunorte, the alumina refining joint venture between Japan and Brazil, will expand its annual alumina production by about 50% to 3.85 million tonnes in 2006 from 2005. The annual output capacity is scheduled to increase to 4.4 million tonnes in 2007, following the completion of the second capacity expansion in July 2006. Alunorte aims to complete the third capacity expansion by mid 2008 and to raise the alumina output capacity to 6.3 million tonnes.Alunorte produced 2.58 million tonnes of alumina in 2005, which rather exceeded the initial plan. Its net sales were around US$ 606.8 million and the profit was about US$ 108.9 million other than the impact of the foreign exchange rate in 2005. The JV could post firm earnings in 2005 as well as 2004 due to the brisk demand and the high alumina price. Then the JV decided to maintain dividends after 2004 with the favorable results in 2005.Alunorte plans to advance the second and third capacity expansion for alumina production along with the original schedule. The JV will procure bauxite, the raw material for alumina, newly from Paragominas mine of CVRD through pipelines, while the JV conveys bauxite from Trombetas mine by water at present. The JV commented the pipeline is the very rare method in the world to convey bauxite. Alunorte could grow to the world major alumina maker after the output capacity expansion and produce alumina with much higher competitiveness.Alunorte is owned by CVRD, the top shareholder, Norsk Hydro, Cia Brasileira de Aluminio and around 5% by Nippon Amazon Aluminium, Japanese investing company for the aluminium refining project in Brazil. Alunorte started alumina production in 1995.