“It's very unusual, perhaps even unprecedented, for two companies in our industry to commit themselves to a sales contract with a 25 year lifespan,” says Oscar Groeneveld, who took over from Sam Walsh as chief executive of Rio Tinto Aluminium at the end of 2004. “It's certainly one of the most significant minerals contracts ever entered into by an Australian company.

“The deal was a consequence of the decision we took in 2001 to expand our alumina business by building the Comalco Alumina Refinery and is consistent with our strategy of maximizing the value of Comalco's vast bauxite deposits at Weipa in North Queensland.”

For Hydro Aluminium, the recent start-up of deliveries under the contract is of great significance. “We've entered a long term relationship with a strong, reliable partner that gives us security of supply from two world class alumina refineries,” says Jon-Harald Nilsen, president of Hydro Aluminium and executive vice president of Hydro. “In a nutshell, the contract matches our future alumina needs with Comalco's ability to supply. Not only that, it fits well with our strategy to improve our cost position in primary aluminium and to reinforce our already strong position in the mid and downstream sectors.

“Our policy is to cover at least half of our alumina needs from our own equity production and to make up the shortfall by buying in from dependable sources under medium and long term contracts,” Nilsen explains. “At present, roughly 60 per cent of Hydro's alumina is sourced from our equity entitlement from bauxite mines in Jamaica and Brazil, while the 500,000 tonnes of alumina a year that Comalco is supplying will account for a major chunk of our buy-in total.”

With 85 years of experience in the production and fabrication of aluminium, Hydro Aluminium is today one of the world's top three integrated aluminium companies along with Alcan and Alcoa. It has 27,000 employees in more than 100 production units in 28 countries and it supplies the market with more than three million tonnes of metal products annually.