Norsk Hydro ASA and the Angolan government have signed a memorandum of understanding (MoU) to explore the feasibility of an integrated project for hydropower and aluminum production.
The project could create a long-term opportunity for the company that could also provide a significant boost to social and economic development within the country. The company was already active in Angola through its oil and gas activities, which have since merged with Statoil to become StatoilHydro ASA.
Last year, Simon Storesund, senior vice-president of Hydro Aluminum, a unit of Norsk Hydro, told Dow Jones Newswires it was looking at Angola, Congo, Mozambique, and South Africa as possible locations for future aluminum plants.
But market conditions for metals have changed considerably since Hydro first started talking with the government, with aluminum prices having more than halved from their July 2008 peak of $3,380 a metric ton. The company has been cutting output in response to poor demand conditions and weak prices, with the key automotive and aerospace sectors badly hit by the economic downturn.