Norsk Hydro: Long-term ICMS tax framework established for Hydro's Brazil operations
(Thomson Reuters ONE) -
The Brazilian state of Pará has published a long-term ICMS tax framework for the
aluminium producer Norsk Hydro ASA and related entities, developed between the
parties. A new 15-year framework will replace the existing ICMS deferral on July
17.
"Our ambition is to develop robust and viable operations in Pará and to be an
enabler for sustainable growth in the region. To do this, we need stable and
predictable framework conditions. We are pleased to have agreed on a long-term
ICMS framework for Hydro's operations in Pará," says Alberto Fabrini, executive
vice president and head of Bauxite and Alumina in Hydro.
The aluminium plant Albras, the alumina refinery Hydro Alunorte, and the bauxite
mine Hydro Paragominas are covered by this framework. Hydro will publish further
details on the framework as soon as possible on www.hydro.com
ICMS is a value added tax collected by the Brazilian states. The aluminium
industry in Pará has an ICMS deferral on intra-state purchases, which expires
July 17, 2015. Hydro Paragominas, Hydro Alunorte and Albras have been subject to
ICMS taxation on diesel and, since February 1, 2014, also de facto on fuel oil,
as the state of Pará changed the collection point of ICMS tax from the
distributor located in the state to oil refineries located outside the state of
Pará. Currently this amounts to around BRL 250 million on an annual basis.
Under the new 15-year ICMS framework, Hydro Paragominas and Hydro Alunorte will
continue to pay ICMS on diesel and fuel oil, while other intra-state purchases
will have a renewed deferral for the period. Albras will pay ICMS on a 50
percent basis of electricity purchases, while other intra-state purchases will
have a renewed deferral for the period. ICMS tax paid by Albras on electricity
is expected to be offset by increasing domestic sales of primary aluminium, at a
sales price including ICMS.
Hydro will continue to support verticalization through the aluminium value
chain, contribute to development in the region and act as an enabler for
sustainable growth in the state of Pará. Bauxite production at Hydro Paragominas
is refined at Hydro Alunorte alumina refinery. Alumina from Hydro Alunorte is
used as raw material in the primary aluminium plant Albras, a joint venture
between Hydro and the Japanese consortium NAAC (Nippon Amazon Aluminium Co.
Ltd.). Hydro also extends the value chain through selling 50,000 tonnes liquid
aluminium annually from Albras to local cable producer Alubar. Hydro and Albras
will increase domestic sales volumes on market terms to support the
establishment of new value added downstream industries in Pará. Albras is also
planning to high-grade its portfolio by upgrading 40,000 tonnes of its annual
production capacity from standard ingot to primary foundry alloys, for sale to
the domestic market.
Through the "from B to A" improvement program, Hydro has over the last years
initiated significant efforts to lift production to nameplate capacity at Hydro
Paragominas (9.9 million tonnes) and Hydro Alunorte (6.3 million tonnes), while
reducing costs and improving operations. The increase to nameplate capacity has
been achieved at Hydro Paragominas. Hydro Alunorte is still increasing
production towards nameplate capacity. During the process of stabilizing and
increasing production, Hydro Alunorte has identified additional measures to lift
production beyond nameplate capacity, towards 6.6 million tonnes.
The CAP alumina refinery project is a joint venture between Hydro and Dubal
Holding LLC. The project is currently put on hold due to market conditions. The
CAP project will be subject to a technical review and Hydro is investigating the
potential for continuing this project within 2018, should the market conditions
improve sufficiently. This will require expanding the Paragominas bauxite mine
to 14.8 million tonnes.
Hydro Paragominas has a nameplate production capacity of 9.9 million tonnes of
bauxite annually. Hydro Alunorte, owned 92% by Hydro, has a nameplate capacity
of 6.3 million tonnes alumina annually and is the world's largest alumina
refinery. Albras, owned 51% by Hydro and 49% by the Japanese consortium NAAC
(Nippon Amazon Aluminium Co. Ltd.) has an annual production capacity of 460,000
tonnes. The CAP project, owned 81% by Hydro and 19% by Dubal Holding LLC, is
expected to have an initial annual capacity of 1.9 million tonnes of alumina.
All operations are located in the state of Pará in Brazil.
Investor contact
Contact Pål Kildemo
Cellular +47 97096711
E-mail Pal.Kildemo(at)hydro.com
Press contact
Contact Halvor Molland
Cellular +47 92979797
E-mail Halvor.Molland(at)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.
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Norsk Hydro via GlobeNewswire
[HUG#1939287]
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Datum: 17.07.2015 - 13:37 Uhr
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News-ID 407600
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