Court orders Alunorte to cut 50% production and halt operations at DRS2 bauxite residue disposal

In another update from Pará, Brazil, after the instruction of Secretariat of Environment and Sustainability in the Brazilian state of Pará (SEMAS) to Hydro to cut 50% production at its Alunorte alumina refinery, a regional court issued a ruling on Wednesday, February 28, demanding Hydro to cut production by 50 per cent at its Alunorte alumina refinery.

Hydro has been accused that rainstorm had led to red mud leakages from its Alunorte alumina refinery into the nearby river causing contamination of water and land. SEMAS also instructed Hydro to stop using one of two tailing dams at its Paragominas bauxite mine, located around 250 km west of Alunorte. Federal Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) also issued a notice ordering Hydro to discontinue operations of the Alunorte’s bauxite residue disposal. Brazilian Minister of the Environment Jose Sarney Filho urged IBAMA to issue suspension notice to Alunorte operations.

The court further ruled that Alunorte will halt operations at the DRS2 bauxite residue disposal for the time being. The operations would only resume once the integrity of DRS2 is fully verified and an operational license is issued. It is to be noted that Alunorte currently has an installation license, which covers the construction and commissioning of DRS2.

Hydro Alunorte, located in the region of Barcarena, is the world's largest alumina refinery and employs around 2,000 people and has a nameplate capacity of an annual 6.3 million tonnes. On average, 14% of its production goes to the domestic market and the other 86% is exported.  Hydro holds 92.1 per cent of Alunorte ownership.

Hydro is currently reviewing the financial and operational implications of the court's ruling. The ruling will also impact its customers and employees to a considerable extent.

Hydro is co-operating fully with the investigation procedures and collaborating with all regional and federal authorities. The company established a fast-working expert task force to conduct a full review of Alunorte operations, reporting directly to President and CEO Svein Richard Brandtzæg.