Alcoa  has signd an agreement with Vietnam's state-owned minerals development company, Vietnam National Coal-Mineral Industries Group (Vinacomin) for acquiring a stake in Nhan Co alumina refinery that is to be constructed in Dak Nong Province in Vietnam's Central Highlands, which has  extensive reserves of high quality bauxite.

Vinacomin has been granted a leading role in the development of Vietnam's mineral resources, by the government.

Under the agreement, Alcoa World Alumina and Chemicals (AWAC), a global alliance between Alcoa and Alumina Ltd, in which Alcoa holds a 60-per cent stake, will conduct due diligence on the acquisition of a 40 per cent interest in the 600,000 metric tons per year Nhan Co refinery.

If the transaction proceeds, AWAC will take 40-per cent shareholding in the joint stock company that owns the Nhan Co bauxite mine and alumina refinery, with the majority 51-per cent stake being with  Vinacomin. Other investors will hold the remaining 9 per cent.

In addition AWAC and Vinacomin will conduct a joint feasibility study on the Gia Nghia bauxite mine and alumina refinery project, also located in Dak Nong province, in which the first stage capacity is expected to be between 1.0 and 1.5 million metric tons of alumina per year.

The agreement follows the recent permission granted to Vinacomin by the government of Vietnam to establish a joint stock companies with foreign partners holding a maximum of 40 per cent stake. 

Vietnam and the United States embarked on economic coperation in 2006 followed by the normalisation of trade relations between the two countries in 2007.

"Alcoa is delighted to be invited to participate in the development of the Vietnamese economy and particularly to be engaged in prospective development within the Central Highlands," said Alcoa's Reitan.

"Combining Vinacomin's local knowledge and proven capacity for successful development of Vietnam's mineral resources with Alcoa's world-best alumina refining technology, operating practices, and sustainable development philosophy, and our firm commitment to education, training, and recruitment of local employees, creates an exceptionally strong partnership, capable of serving the interests of the Vietnamese people and those of Alcoa for generations to come," Reitan added.

Alcoa says AWAC and Vinacomin will now embark on detailed studies with a view to completing definitive costs and definitive investment agreements as quickly as possible.

Alcoa is the global leader in the production and management of primary aluminum, fabricated aluminum and alumina combined, through its active and growing participation in all major aspects of the industry.