London, REUTERS:
NORWEGIAN INDUSTRIAL group Norsk Hydro is set to launch a bid for majority ownership of Jamaican aluminium refiners Alumina Partners of Jamaica (Alpart), while seeking a joint venture partner to help boost output, a senior union source at the plant said.
Norsk Hydro owns 35 per cent of Alpart's bauxite mine and alumina refinery and has the right of first refusal to buy Alpart's remaining shares from Kaiser Aluminium Corp.
Kaiser is looking to emerge from bankruptcy proceedings and in January signed an agreement to sell its 65 per cent stake in Alpart to Swiss metals trader Glencore for a minimum of US$160 million.
"Hydro would be prepared to take up the 65 per cent stake in Alpart providing it can find a willing partner to take its existing shares," the source told Reuters from Jamaica. "Hydro wants the sole right in running Alpart and said they would be willing to put more money into the plant only if Alpart (Kaiser) gave them a bigger say in running the plant.
"Hydro is still taking visitors to the plants, bringing some Chinese people from Minmetals in October and again in January, although they brought some Russians at one stage."
A Chinese industry source said state-controlled Minmetals had been unsuccessful in its bid to buy Kaiser's stake in Alpart. The source said Minmetals had held talks with Norsk Hydro and further negotiations were pending, while Minmetals awaited a price offer from the Norwegian company.
A Minmetals official said on Wednesday the company would make an announcement in due course about its involvement with Kaiser. But he did not specify whether he was referring to the Alpart refinery or to Minmetals' alumina supply contract with Kaiser, which remains valid after the two parties settled out of court recently following Kaiser's motion to nullify the deal.
THIRTY DAYS TO ACT
Kaiser, which filed for Chapter 11 bankruptcy in February 2002, had asked the bankruptcy court in Delaware to reject or nullify alumina supply agreements with several companies covering at least 800,000 tonnes annually, of which traders said 500,000 were destined for China.
Kaiser said cancelling the contracts would have enabled it to sell alumina at higher prices and speed up its financial recovery.
Trading sources said Kaiser had agreed with Minmetals to receive US$63 a tonne more than the contracted price of about US$160 a tonne for 2004 shipments and US$20 more in 2005. Spot prices have soared to currently more than US$500 a tonne.
The deal between Kaiser and Glencore is subject to approval by the United States bankruptcy court for the district of Delaware, which Kaiser expected to happen on March 22.
However, Hydro will have 30 days after Kaiser's receipt of court approval to decide to buy Kaiser's stake at a price matching the agreement, a spokesman at Hydro said.
"We will consider all options," he said.
If Hydro exercised its right, Glencore would be entitled to reimbursement of expenses incurred in negotiating the agreement up to a limit of US$250,000. Glencore was not immediately available for comment.
Hydro has a major share about 35 per cent in Brazilian alumina refiner Alunorte, which is seeking to secure alternative supplies of bauxite to reduce the risks involved in an expansion project.
One potential supplier could be Jamaica, where there are many bauxite and alumina plants, including Alpart.
Alunorte's recently started work on a project to boost alumina capacity in Para state to 4.2 million tonnes a year from 2.4 million by early 2006.
In January, Kaiser also concluded discussions with Unistar Holdings Inc., a distributor to China, about creating a supply pact through which Unistar would distribute about 1.1 million tonnes of Jamaican alumina to Minmetals between 2003 and 2007.
