Alcan Inc., the world's third-largest aluminum company, agreed to sell its 45 percent stake in India's Utkal Alumina International Ltd. to its partner in the venture, Hindalco Industries Ltd.
The sale probably will be completed during the third quarter, and the financial terms weren't disclosed, Montreal- based Alcan said today in a statement. Hindalco already owns the remaining 55 percent of Utkal Alumina.
The venture was established in 1992 to develop a bauxite mine and alumina refinery with potential capacity of as much as 3 million tons a year in the Indian state of Orissa. Bauxite ore is refined into alumina, which is smelted into aluminum. Alcan said in April, when it announced plans to sell its stake, that it didn't have enough influence in the venture.
Hindalco, based in Mumbai, plans to triple aluminum output to 1.5 million metric tons by 2012 to become one of the world's five largest producers. The company, which also has interests in telecommunications, cement, metals, textiles and financial services, is India's biggest aluminum producer.
Building the refinery for Utkal, Alcan said in December, will lead to the resettlement of about 180 families under a plan that drew resistance from local residents also concerned about the risk of environmental damage. Protesters have voiced their concerns at Alcan's shareholder meetings.
Aditya Birla Group
Hindalco is part of the Aditya Birla Group run by Kumar Managalam Birla. The company in February agreed to buy Novelis Inc., a maker of aluminum sheet that was spun off from Alcan in 2005.
Work on the Utkal alumina project is in progress, including some foundations. The layout of the non-plant buildings has been completed and detailed engineering for mines is expected to be complete by March 2009.
Shares of Alcan, which has agreed to be acquired by Rio Tinto Group, rose 23 cents, or 0.2 percent, to $96.84 at 4:15 p.m. in New York Stock Exchange composite trading.
Source : Bloomberg