Norsk Hydro: Hydro has decided to invest in technology pilot in Karmoy
February 11 2015 - 1:05AM
Hydro has made a formal investment decision to develop a full scale
pilot plant in Karmøy to demonstrate the world's most energy and
climate efficient aluminium production. A final build decision for
the project, with total costs estimated at NOK 3.9 billion, is
conditioned on Hydro securing a robust power solution for the
technology pilot.
"The Karmøy pilot will be the largest investment in mainland
industry in a decade, beyond oil and gas. The decision thus
demonstrates our confidence in the Norwegian technology cluster and
Norway's future position in sustainable production of aluminium in
a global climate perspective," says Hydro's President and CEO,
Svein Richard Brandtzæg.
Through the technology pilot in Karmøy, Hydro aims to
industrialize the world's most energy and climate efficient
technology for aluminium production, with an ambition to reduce
energy consumption by 15% per kilo aluminium produced compared to
the world average, and with the lowest CO2 footprint in the
world.
The pilot plant is designed with an annual production capacity
of approximately 75,000 tonnes, with a possible start-up in the
second half of 2017, at the earliest. Project costs are estimated
at NOK 3.9 billion, including NOK 1.5 billion in support from
Enova. EFTA's surveillance authority, ESA, has recently approved
this support.
- An important condition for the project has now been confirmed,
and we will thus continue our work to mature the project towards a
final building decision. Our world leading technology organization
is working at full speed to prepare for construction start, which
we hope to clarify early next year. The most important thing
remaining is to find an overall power solution for the pilot plant,
Brandtzæg says.
An overall power solution includes new competitive power
contracts for the pilot plant, and a clarification from Norwegian
authorities regarding the industrial ownership of power within the
current consolidation model, which will enable withdrawal of power
instead of financial dividends. During the last week, Hydro has
entered into a new power contract with Lyse Produksjon AS of 330
GWh annually in the period 2031-2040, which covers a third of the
plant's power needs in this period. Hydro is working actively to
cover the remaining power needs for the pilot towards a final
building decision.
Hydro has previously received assurance from Statnett that it
will be possible to extend the power grid in the area in step with
an industrial development in Karmøy.
Investor contact
Contact Pål Kildemo
Cellular +47 97096711
E-mail Pal.Kildemo@hydro.com
Press contact
Contact Halvor Molland
Cellular +47 92979797
E-mail Halvor.Molland@hydro.com
Certain statements included within this announcement contain
forward-looking information, including, without limitation, those
relating to (a) forecasts, projections and estimates, (b)
statements of management's plans, objectives and strategies for
Hydro, such as planned expansions, investments or other projects,
(c) targeted production volumes and costs, capacities or rates,
start up costs, cost reductions and profit objectives, (d) various
expectations about future developments in Hydro's markets,
particularly prices, supply and demand and competition, (e) results
of operations, (f) margins, (g) growth rates, (h) risk management,
as well as (i) statements preceded by "expected", "scheduled",
"targeted", "planned", "proposed", "intended" or similar
statements.
Although we believe that the expectations reflected in such
forward-looking statements are reasonable, these forward-looking
statements are based on a number of assumptions and forecasts that,
by their nature, involve risk and uncertainty. Various factors
could cause our actual results to differ materially from those
projected in a forward-looking statement or affect the extent to
which a particular projection is realized. Factors that could cause
these differences include, but are not limited to: our continued
ability to reposition and restructure our upstream and downstream
aluminium business; changes in availability and cost of energy and
raw materials; global supply and demand for aluminium and aluminium
products; world economic growth, including rates of inflation and
industrial production; changes in the relative value of currencies
and the value of commodity contracts; trends in Hydro's key markets
and competition; and legislative, regulatory and political
factors.
No assurance can be given that such expectations will prove to
have been correct. Hydro disclaims any obligation to update or
revise any forward looking statements, whether as a result of new
information, future events or otherwise.
This information is subject of the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities Trading
Act.
HUG#1893410
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