"Hindalco Industries has finalised its arrangement for acquiring alumina refinery and bauxite mines from Novelis Do Brasil, a wholly-owned subsidiary of Novelis. The agreement was executed between Novelis Do Brasil, Novelis and AV Minerals (Netherlands), a wholly-owned subsidiary of Hindalco Industries," the company said in a statement.
The Alumina Refinery, with a capacity of 145 KTPA, situated in the city of Ouro Preto, State of Minas Gerias, Brazil, has mining rights of over 50 million tonnes of bauxite reserves.
"This transaction will be done by transferring the Alumina assets of Novelis Do Brasil into a new company to be formed in Brazil and acquisition of all the shares of the new company by AV Minerals," Hindalco said in a filing to the Bombay Stock Exchange (BSE).
The acquisition will take place after all necessary approvals and permits for restarting the idle facilities and operations of the company are obtained in Brazil, it said.
In June 2009, Novelis Do Brasil had suspended the production of alumina at this refinery.
The company said this corporate reorganisation will allow the new company, with its sole focus on Mining and Alumina business, to create value out of the moth-balled assets for all the stakeholders, while Novelis Do Brasil will continue to focus on its core downstream aluminium rolling business.
In 2007, Novelis was acquired by Hindalco Industries and following the merger, Novelis became a wholly owned subsidiary of Aditya Birla Group.
With the addition of Novelis, Hindalco became the world's largest aluminum rolling company and one of the biggest producers of primary aluminum in Asia.
Hindalco Industries shares were trading at Rs 123.40, up 0.94 per cent from previous close on the BSE in the afternoon.