UPDATE 1-Alcoa signs development pact with Vietnam

NEW YORK, June 24 (Reuters) - Alcoa Inc (AA.N) said on Tuesday it agreed with Vietnam's top minerals development company to help develop that country's aluminum industry, including a bauxite mine and an alumina refinery.

Alcoa said in a press release it signed a cooperative agreement between Vietnam National Coal-Mineral Industry Group (Vinacomin) and one of its joint ventures to consider buying a stake in an existing alumina refinery project in Vietnam.

Under the pact, Alcoa World Alumina and Chemicals (AWAC), an alliance between Alcoa and Australia's Alumina Ltd (AWC.AX), will conduct due diligence on a 40 percent interest in the 600,000-tonne-a-year Nhan Co alumina refinery to be constructed in Dak Nong Province in Vietnam's Central Highlands.

The Pittsburgh-based aluminum giant said Nhan Co has access to extensive reserves of high quality bauxite, the raw material used to produce aluminum.

If successful, Vinacomin would own a 51 percent stake in the Nhan Co bauxite mine and alumina refinery, with AWAC owning 40 percent and other investors taking a 9 percent stake.

The aluminum giant also said it will conduct a joint feasibility study with Vinacomin on the Gia Nghia bauxite mine and alumina refinery project also in in Dak Nong province, with initial capacity expected at 1.0 million to 1.5 million tonnes of alumina per year.

The Government of Vietnam recently granted permission to Vinacomin, a state-owned company with a leading role in the development of Vietnam's mineral resources, to establish joint ownership companies, with foreign partners holding a maximum interest of 40 percent.

The joint project will combine Vinacomin's local knowledge with Alcoa's alumina refining and operating expertise, said Bernt Reitan, Alcoa's president of Global Primary Products.

Alcoa added that AWAC and Vinacomin plan to complete definitive cost and investment agreements as quickly as possible.

(Reporting by Carole Vaporean. Additional reporting by Michael Erman; Editing by David Gregorio)