Norsk Hydro said Tuesday it was uncertain when alumina production at the Alunorte refinery in Brazil may be able to revert to normal levels, since output was cut from March 1 due to environmental issues.
"The duration of this curtailment is uncertain, as well as the operational and financial impacts for Hydro, depending, amongst other things, on the development of the market prices for aluminum, alumina and other raw materials," the company said in a statement.
The environment office in Brazil's Para state has accused the Alunorte refinery of harming the environment. Hydro, for its part, has said internal and external audits have indicated that no material environmental damage has been caused by the refinery.
"Findings of an internal and an external task force confirm that there was no overflow from the bauxite residue deposit areas, no indication or evidence of contamination to nearby local communities, or any significant or lasting environmental impact to nearby rivers from Alunorte as a result of the heavy rainfall," Hydro said Tuesday.
Hydro owns 92.1% of Alunorte. It is the world's largest alumina refinery, with a nameplate capacity of 6.3 million mt/year and typically turns out about 5.8 million mt/year.
The refinery supports the 45,000 mt/year Albras aluminum smelter in Brazil, which has also halved its output rate. In addition Alunorte typically exports sizable volumes of alumina to Africa, Europe, Russia, the Americas, and the Middle East.
Alunorte's run cut has removed about 242,000 mt/month of alumina from the market, and created supply concerns over the last five months.
The price of alumina has been subjected to much turbulence since the plant's troubles began. The Platts Australian alumina daily assessment rose $55/mt in the last month to $495/mt FOB on July 24.
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