April 15, 2019 / 8:18 AM / 8 months ago

UPDATE 1-Norsk Hydro shares jump on hopes of Brazil ruling

* VAlunorte plant operates at 50 pct after 2018 spill

* Third-party review backs view plant is now safe

* Hydro and prosecutor jointly ask court to lift embargo

* Court’s decision is still pending (Adds analyst, background, bullets)

By Terje Solsvik

OSLO, April 15 (Reuters) - Shares of Norwegian metals maker Norsk Hydro rose on Monday after the company won further support for its bid to resume full output from its Alunorte alumina refinery in Brazil.

The plant, a key supplier to the global aluminium industry, is operating at half capacity following a spill in February 2018 that led regulators and courts to restrict output.

Since the unlicensed emission of untreated water, Hydro has upgraded Alunorte’s facilities to try to convince authorities to allow it to resume full production.

A review by a third-party consultancy backed the company’s argument that Alunorte is now safe to operate, Hydro said late on Friday, prompting the company and a Brazilian public prosecutor to jointly ask a federal court to lift the embargo.

In its statement it gave no indication of when the court decision was likely to be announced.

Hydro shares rose as much as 5.5 percent in early trade.

“Conditions appear to be in place to secure a positive outcome,” brokers DNB Markets wrote in a note to clients, while JPMorgan saw hope of Alunorte returning to 100 percent output in the third quarter.

The refinery is the world’s largest, transforming bauxite from mines in Brazil into alumina, the key material used for making aluminium.

It has an annual production capacity of some 6.2 million tonnes of aluminium oxide, or alumina, compared with global output of the white, powdery substance of close to 100 million tonnes, Norsk Hydro says on its web site.

A decision to restart Alunorte would be a rare piece of good news for Hydro, which is still struggling to recover from a cyber attack last month that paralysed parts of its production and forced many units to switch to manual procedures.

Hydro said on Friday it would postpone its first-quarter earnings report by five weeks as it strives to regain access to systems for reporting, billing and invoicing that were blocked by hackers demanding a ransom.

In a separate incident on April 1, the company also suffered a power outage at one of its plants in Norway, cutting the facility’s aluminium production by 10 percent, and later said it could take months to fully recover. (Reporting by Terje Solsvik Editing by Kirsten Donovan and David Holmes)

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