Norwegian industrial firm Norsk Hydro this week posted its best quarterly results since it became primarily a producer of aluminum in 2007. The company also announced plans to invest NOK 3.9 billion (USD 520 million) in a pilot project for energy- and climate-friendly aluminum production on Karmøy in Rogaland, western Norway.
The project, claimed Hydro CEO Svein Richard Brandtzæg, would be the largest investment in mainland industry outside the oil and gas sector in decades. “It shows our faith in Norwegian technology and Norway’s future position in sustainable production of aluminum in a global climate perspective,” Brandtzæg said. The company has also received NOK 1.5 billion in climate support funding from the state.
The project hinges on what he called a “robust” power solution. Hydro aims to reduce energy consumption by 15 percent per kilo of aluminum produced, compared to the world average. Newspaper Dagens Næringsliv (DN) reported, however, that Hydro hasn’t been able to renew its electricity contract with power producer Statkraft because of disagreement over pricing.
“We wish Hydro good luck with the pilot project and will gladly sell power to it, if we can agree on an acceptable price,” Statkraft director Asbjørn Grundt told DN. If negotiations succeed, the new plant with its new technology will be able to produce 75,000 tons of aluminum a year when finished in 2017.
Hydro’s strong fourth-quarter results, with operating profits of NOK 2.9 billion, were linked to higher aluminum prices and benefits of the weaker Norwegian currency, which make Hydro’s aluminum exports more competitive. The company also cut costs at its operations in Brazil.