No timeline yet on resuming full production at Alunorte refinery: Says Hydro CEO

Norsk Hydro CEO Svein Richard Brandtzaeg said on Tuesday, July 24, that despite talks between the company and Brazilian regulators about full production recommencement at Alunorte alumina refinery, no timeline has been set yet on the final ramp-up.

"We do not know exactly what it will take for the authorities to lift the embargo, and the timing to get back to 100% is still uncertain," he said during the company's quarterly earnings call.

Since February 2018, Norsk Hydro, the major owner of Alunorte, is following Brazilian regulators’ order to operate at 50 per cent cut production rate, as authorities suspected potential leaks from bauxite residue deposits during heavy rainfall. Due to this, the company has also reduced the production capacity at its Paragominas bauxite mine and Albras aluminium plant by 50 per cent.

However, the Secretariat of Environment and Sustainability, regulators in Para, and the Brazilian Institute of the Environment and Renewable Natural Resources, the Brazilian Ministry of the Environment's administrative arm had concluded that there was no overflowing of bauxite residue deposits during February’s rainfall.

The company has been corresponding with those agencies and also Brazil’s Public Prosecutor’s Office to craft a plan to resume full production at the refinery.  Brandtzaeg said once the plan is ready, it will be presented to a judge and receive court order to lift the embargo.

An analyst commented during the call that the situation "feels like it's a chess game, but nobody wants to go first."

CEO said the company is just waiting for the time when the solution will be found and agreed with.