Following orders from federal, state and local authorities in Brazil for the Alunorte alumina refinery to reduce production by 50 percent, Alumina do Norte do Brasil SA (Alunorte) issued a force majeure notice on Friday due to the production cut and current lack of clarity into what measures it would take to return Alunorte to normal operations.
The force majeure notice comes after a period of extraordinary rainfall led to flooding in Barcarena, where Alunorte is situated. Due to concerns over possible water contamination from Alunorte during this flooding, authorities have taken several measures against the alumina refinery, including orders to cut alumina production and halt operations at its DRS2 bauxite residue deposit.
Contingency plans are being implemented, and Alunorte is doing its utmost to reduce the potential negative effect on customers and suppliers.
Hydro, as the largest offtaker of alumina from Alunorte, is taking and assessing a range of possible mitigating actions to minimize the negative effect for its customers.
Hydro is South America’s biggest aluminium company after acquiring Brazilian mining company Vale’s aluminium assets in the state of Pará in 2011. Alunorte is the world’s largest alumina refinery, employs around 2,000 people and has a nameplate capacity of an annual 6.3 million tonnes. Hydro owns 92.1 percent of Alunorte.
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.
No assurance can be given that such expectations will prove to have been correct. Hydro disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Barcarena fact sheet