Hydro has issued a notice of force majeure to its bauxite customers as Hydro will not receive the full contracted volumes from its supplier, MRN, due to lower production at the bauxite mine. This will affect Hydro’s bauxite deliveries to customers.
MRN, where Hydro has a 5% ownership and additional 40% offtake, is experiencing problems with its tailing systems due to lack of water. The lack of water is caused by a very dry period in the region. This is expected to reduce production of bauxite from a previously expected level of 17-17.5 million mt to around 15-15.5 million mt in 2017.
As the production shortfall is mostly related to dry bauxite for the export market, it is not expected that production at the Alunorte alumina refinery will be affected.
MRN has a nameplate capacity of around 18 million mt and is one of the world's largest bauxite mines.