HYDRO WILL EXIT UTKAL
17 December 2001 - Hydro Aluminium

Hydro's 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. The lack of progress for the Utkal alumina production is also part of the decision.

Alumina, also known as aluminium oxide, is an important raw material for production of primary aluminium. Hydro has equity production of alumina in Jamaica and Brazil. The Brazilian Alunorte refinery is going through an expansion which will substantially increase Hydro's production capacity for alumina.

A balanced alumina market with a variety of suppliers is envisaged for the coming years. This will allow Hydro to pursue its strategy of alumina supply through a combination of own production, alliances and long term contracts.

The shareholders agreement of Utkal Alumina gives the remaining partners pre emption rights. The legal process required for Hydro to leave the partnership has been initiated.

Utkal Alumina has not started any construction in the planned project area. Based on partnership policies, some socio economic development work is going on. There is also a continuos dialogue between the company, the government and the local population.

The proposed host community of the project in Kashipur, Orissa is in dire need of social and economic development. Mining and industrialisation, when implemented in a careful and responsible way, may contribute to a sustainable development in this area and give opportunities for thousands of below the poverty line people to better their livelihood conditions.

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