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2016-02-17

Norsk Hydro: Hydro to build the Karmøy technology pilot

Hydro has made a formal build decision for the planned full-scale technology
pilot at Karmøy, Norway, aiming to verify the world's most climate and energy
efficient production of primary aluminium. Total costs are estimated at NOK
4.3 billion, consisting of net project costs of NOK 2.7 billion and around
NOK 1.6 billion in support from Enova.

First metal from the technology pilot is expected during the second half of
2017.

"After several successful improvement programs, the next steps in our efforts
to further strengthen our cost curve position will increasingly rely on our
ability to advance our industry-leading position in technology and
innovation," says Hydro president and CEO Svein Richard Brandtzæg. "The
Karmøy technology pilot will play a key role in realizing this ambition,
ensuring that the Norwegian technology cluster remains the global leader in
sustainable aluminium production."

With the pilot project, Hydro aims to industrialize the world's most climate
and energy efficient aluminium electrolysis technology. The ambition is to
reduce energy consumption by around 15 percent per kilo aluminium produced
compared to the world average, with the lowest CO2footprint in the world. In
addition, the implementation of technology spin-offs to existing production
lines are expected to improve productivity in the current primary aluminium
portfolio, contributing to Hydro's capacity creep ambition of an additional
200,000 tonnes per year by 2025.

The technology pilot is designed with an annual production capacity of
approximately 75,000 tonnes, consisting of 48 cells with 12.3 kWh/Kg HAL4e
technology and 12 cells with 11.5-11.8 kWh/kg HAL4e Ultra technology. Total
costs are estimated at NOK 4.3 billion, consisting of net project costs of
NOK 2.7 billion and around NOK 1.6 billion in support from Enova. The project
costs are adjusted for inflation and currency developments since the
investment decision was announced in February 2015.

An overall power solution in Norway includes new competitive power contracts
for Hydro's existing portfolio and the Karmøy pilot, and a pending decision
from Norwegian authorities regarding industrial ownership of power within the
current consolidation model. This would enable private minority shareholders
in power production companies to take out dividends as physical power
offtake, rather than being limited to just receiving financial dividends.

Hydro's investment in the Karmøy technology pilot is the largest, single
investment in Norwegian mainland industry outside the oil and gas sector
since Hydro expanded the Sunndal aluminium plant in 2002-2004.

Investor contact
Contact Pål Kildemo
Cellular +47 97096711
E-mail Pal.Kildemo@hydro.com

Press contact
Contact Halvor Molland
Cellular +47 92979797
E-mail Halvor.Molland@hydro.com

Certain statements included within this announcement contain forward-looking
information, including, without limitation, those relating to (a) forecasts,
projections and estimates, (b) statements of management's plans, objectives
and strategies for Hydro, such as planned expansions, investments or other
projects, (c) targeted production volumes and costs, capacities or rates,
start up costs, cost reductions and profit objectives, (d) various
expectations about future developments in Hydro's markets, particularly
prices, supply and demand and competition, (e) results of operations, (f)
margins, (g) growth rates, (h) risk management, as well as (i) statements
preceded by "expected", "scheduled", "targeted", "planned", "proposed",
"intended" or similar statements.

Although we believe that the expectations reflected in such forward-looking
statements are reasonable, these forward-looking statements are based on a
number of assumptions and forecasts that, by their nature, involve risk and
uncertainty. Various factors could cause our actual results to differ
materially from those projected in a forward-looking statement or affect the
extent to which a particular projection is realized. Factors that could cause
these differences include, but are not limited to: our continued ability to
reposition and restructure our upstream and downstream aluminium business;
changes in availability and cost of energy and raw materials; global supply
and demand for aluminium and aluminium products; world economic growth,
including rates of inflation and industrial production; changes in the
relative value of currencies and the value of commodity contracts; trends in
Hydro's key markets and competition; and legislative, regulatory and
political factors.

No assurance can be given that such expectations will prove to have been
correct. Hydro disclaims any obligation to update or revise any forward
looking statements, whether as a result of new information, future events or
otherwise.

This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Norsk Hydro via Globenewswire

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