Hydro has signed a letter of intent (LoI) with Vale to acquire its 40% interest in Mineração Rio do Norte (MRN), a bauxite producer in Brazil.
The Norwegian company's possible acquisition is expected to bolster its global position.
For the deal, the parties are required to seek support from the other MRN shareholders and plan to go ahead in accordance with the terms of the shareholders' agreement.
Existing shareholders of MRN are Vale (40%), Alcoa (18.2%), South 32 (14.8%), Rio Tinto (12%), CBA (10%) and Hydro (5%).
Situated in the westernmost part of the state of Pará, MRN has been in operation since 1979.
With mining licences covering a total 143,000ha, operations at MRN include mine infrastructure and equipment.
Other operations include railway, stockyard, beneficiation plant, tailings disposal system, driers, port and power generation facilities.
In 2011, Hydro acquired other Brazilian aluminium assets of Vale, including the 57% interest in the Alunorte alumina refinery, the Paragominas bauxite mine.
The company also bought a 51% interest in the Albras smelter, and has 61% interest in the CAP alumina refinery project in the state of Pará.