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Hydro prepares to reduce Alunorte production by 50%

The Secretariat of Environment and Sustainability (SEMAS) in the Brazilian state of Pará has formally notified the Norwegian aluminium company Norsk Hydro ASA’s refinery Alunorte on Tuesday, February 27, to cut the production of calcined alumina with 50%.

SEMAS has ordered Alunorte to cut 50% in the production of calcined alumina and requested the reduction to be completed within March 1. Alunorte will receive a daily fine of approx. BRL 500 000 if the production has not been reduced in time. Alunorte is currently preparing to comply with the requirement set by SEMAS.

Contingency plans will be implemented to reduce the potential negative effect on customers.

“We are doing our utmost to limit the impact of this challenging situation for our employees, our customers and for the communities around us,” says President & CEO Svein Richard Brandtzæg. 

While it is too early to determine the size and impact, a production cut could potentially have significant operational and financial consequences. 

The background for these measures taken by SEMAS is non-compliance with an order issued by SEMAS on February 23 to have 1 meter freeboard in the water basins in DRS1 at Alunorte within the deadline of February 26. By adding additional pumps and increasing the water treatment capacity, the 1 meter freeboard requirement was met on February 27.

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Cautionary note 

Certain statements included in this announcement contain forward-looking information, including, without limitation, information relating to (a) forecasts, projections and estimates, (b) statements of Hydro management concerning plans, objectives and strategies, such as planned expansions, investments, divestments, curtailments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in Hydro's markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, and (i) qualified statements such as "expected", "scheduled", "targeted", "planned", "proposed", "intended" or similar.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include, but are not limited to: our continued ability to reposition and restructure our upstream and downstream businesses; changes in availability and cost of energy and raw materials; global supply and demand for aluminium and aluminium products; world economic growth, including rates of inflation and industrial production; changes in the relative value of currencies and the value of commodity contracts; trends in Hydro's key markets and competition; and legislative, regulatory and political factors.

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