Norsk Qatalum plant hit by further delays

Norwegian aluminum producer Norsk Hydro yesterday said its joint-venture aluminum plant Qatalum won’t reach its full production capacity until the end of the third quarter after suffering further delays.

Qatalum, a joint venture between Qatar Petroleum and Norsk Hydro, was hit by a power outage in August last year and since then production has been reduced. It is currently producing at 70% of capacity, and the ramp-up to full production has been postponed due to a delay in commissioning of two steam turbines in the power plant that supplies energy to the smelter.

Norsk Hydro had previously said Qatalum would produce at full capacity from June.

Qatalum is Hydro’s most important smelter, representing about 15% of its aluminum production, and the company’s shares fell after news of the delay.

Carl Christian Bachke, an analyst at RS Platou Markets, said the delays at Qatalum are a “bump in the road,” which will hurt earnings for 2011 but are unlikely to be a worry further ahead.