To improve our competitive position and secure access to the raw material for aluminium production, Hydro made the strategic move to buy the aluminium assets from Vale, a Brazil-based mining and metals company in 2011. Hydro has had a presence in Brazil since the late 1970s through an ownership stake in the bauxite mining company Mineração Rio do Norte (MRN) and an ownership share in Alunorte alumina refinery since the mid-1990s.
Hydro’s bauxite mine, Paragominas, and alumina refinery, Alunorte, are located in the state of Pará in Northern Brazil and are connected by a 244 km bauxite slurry pipeline. Located next to Alunorte is the primary aluminium plant Albras, where Hydro has 51 percent ownership. In addition, Hydro has three aluminium extrusion plants in Southern Brazil. Hydro employs around 6,000 permanent employees and 8,000 contracted workers (full-time equivalents) in Brazil in total. In addition, Hydro has a 5 percent ownership interest in MRN and off-take agreements with Vale for a further 40 percent of the bauxite volume produced by MRN.
Bauxite reserves are widely distributed around the world, particularly in tropical and subtropical regions. Guinea, Australia, Brazil, Vietnam, and Jamaica hold over 70 percent of the world’s known bauxite reserves.
Bauxite mining is a form of surface mining, known as strip mining. It involves the removal of vegetation, topsoil, and overburden in order to get to the underlying bauxite deposit. The process is then repeated on the subsequent strip. As a result, bauxite mining operations tend to disturb relatively large areas. Hydro’s mine is in an area that is recognized as the deforestation belt around the central Amazon region. In the municipality of Paragominas, there has been a reduction in the forest area of more than 60 percent over a period of 30 years. Within the mine itself, a number of the areas were exposed to selective logging and clear-cutting before the commencement of bauxite mining operations in 2007. Reforestation and wildlife management at Paragominas are core elements of our sustainability strategy.
The Barcarena region, where the Alunorte alumina refinery and Hydro’s Albras smelter is located, ranks below the Brazilian average on the Human Development Index (a measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable, and having a decent standard of living). Basic services, such as education, safety, and sanitation are challenging. While these are public services, we play our part in the sustainable development of the full region by investing technical and financial resources in education, skills development, and empowerment of local communities.
Hydro Bauxite & Alumina, including the alumina refinery Alunorte and the bauxite mine Paragominas and Hydro’s Albras smelter, is certified according to the Aluminium Stewardship Initiative (Performance Standard and Chain of Custody), which is a leading standard for responsible production in the Aluminium sector.
Hydro’s supplier and business partner requirements regarding social and environmental responsibility are, as stated in our global directives and procedures, an integral part of all stages of the procurement process. The requirements cover issues related to the environment, human rights, anti-corruption, and bribery, and working conditions, including the work environment. These requirements set out in Hydro’s Supplier Code of Conduct are based on international standards, including UN Global Compact, the ILO core conventions, UN Guiding Principles on Business and Human Rights, and other UN documents and instruments. Find more information about responsibility in our supply chain here.
Developing and strengthening suppliers is an important pillar of our approach. We work to improve supplier performance through corrective action plans or supplier development programs. In Brazil, the Supplier Development Program has reached almost 200 local businesses. You can read more about the program in the Sustainability report for Brazil. Over the last 10 years, we have invested more than BRL 10 billion in Brazil, and in 2018 alone, more than BRL 3 billion were invested on the purchase of goods and services in addition to BRL 662 million in paid taxes.