Vale's dam failure will not influence decision on Alunorte, sources say

The disaster caused by Vale’s dam rupturing in the Brazilian state of Minas Gerais has no connection to the issue surrounding Norsk Hydro’s alumina refinery Alunorte and will probably not stall its return to 100% capacity, market observers told Fastmarkets during the week.

Norwegian aluminium group Hydro is waiting for approval from the federal justice in Brazil to increase output at Alunorte. Two restrictions – one over a solid waste deposit and another regarding 50% of the site’s production capacity – are still in place. The alumina refinery has been investigated since February 2018, when heavy rains in Barcarena raised concerns about a potential flood of its solid waste deposit 2 (DRS2). Alunorte has been prohibited from using half its capacity of 6.3 million tonnes per year – the largest in the world – since March.  External audits confirmed the material did not overflow, although an unknown pipe that poured out muddy water from the facility was found. Hydro signed an agreement with Pará authorities and public prosecutors to compensate for the event.  The absence of 50% output from the world’s biggest alumina producer has boosted prices. Fastmarkets’ alumina index in Australia reached an all-time high of...

Published

Alice Mason

Renato Rostás

January 30, 2019

17:30 GMT

London, São Paulo