Portugal’s mining strategy may favour copper over lithium
Portugal already has the largest copper mine in the European Union, operated by Lundin Mining.
Hydro had underlying earnings before financial items and tax (EBIT) of NOK 1,448 million in the first quarter, up from NOK 588 million in the fourth quarter. Higher realized aluminium prices and premiums, higher volumes and lower operating costs lifted underlying results for the quarter.
“Closing the deal to acquire Vale’s aluminium assets was a milestone in Hydro’s history as a global and truly integrated aluminium company. This transforming move secures access to bauxite and alumina for aluminium production for decades to come, providing us with a solid platform for the future,” Hydro’s President and CEO Svein Richard Brandtzæg said.
“At the end of the first quarter, the large Qatalum aluminium plant was producing at more than 60 percent of full capacity, and ramp-up is continuing towards full production from June. Completion and full output at the Qatalum smelter will be another landmark event for Hydro,” Brandtzæg said.
After closing the Vale deal on February 28 this year, Hydro is reporting results for its new Bauxite & Alumina business area for the first time this quarter, including the acquired assets from March 1. Underlying EBIT for Bauxite & Alumina improved due to higher LME-linked alumina prices and the effect of including the acquired bauxite and alumina activities. Weak production performance had a negative impact.
Underlying results for Primary Metal rose significantly in the first quarter from the fourth, due to higher realized aluminium prices, higher realized premiums and lower fixed costs. Positive developments were partly offset by rising raw material costs. Operating results for Qatalum, the joint venture between Qatar Petroleum and Hydro, improved in the quarter. Underlying EBIT for Primary Metal included NOK 145 million of insurance proceeds relating to the power outage at the plant in August last year.
In light of recent positive market developments, Hydro will restart 15,000 tonnes annual capacity at its Norwegian Sunndal aluminium plant line 3 in June, preparing to resume full production at the plant, which has been running at reduced capacity since March 2009 due to a very weak market for aluminium.
“We are preparing to restart Sunndal 3, as markets showed considerable recovery throughout 2010, stabilizing into the first quarter 2011. Conditional on continued satisfactory market conditions, Hydro’s intention is to restart the complete 100,000 tonnes line in the second half 2011,” Brandtzæg said. The timing for a full restart will be decided later.
Hydro’s mid and downstream operations delivered substantially higher underlying EBIT, due to higher sales volumes, higher margins and lower operating and maintenance costs.
Underlying EBIT for Energy increased on higher spot prices, higher net spot sales and lower transmission costs.
Net cash used in operating activities amounted to NOK 0.6 billion for the quarter including increased working capital. Including the Vale transaction, net cash used in investment activities amounted to NOK 6.4 billion in the quarter. Following the Vale transaction debt increased by NOK 5.8 billion resulting in a net debt position of NOK 2.0 billion at the end of the quarter.
