September 6, 2018 / 7:51 AM / 2 months ago

Norsk Hydro working to convince Brazil to resume full output at Alunorte refinery

LONDON, Sept 6 (Reuters) - Norsk Hydro is working to convince Brazilian authorities to allow it to resume full output at its Alunorte plant, the world’s biggest alumina refinery, following two deals pledging social and environmental action, a top executive said.

The deals, signed late on Wednesday in Brazil, were “an important step” but not a guarantee it would be allowed to resume full production at Alunorte, John Thuestad, Norsk Hydro’s executive vice-president for bauxite and alumina, told Reuters.

“We see this as an important step, but for us, it is not a guarantee of getting the embargo lifted,” Thuestad, who led the negotiations with Brazilian authorities, said in a telephone interview on Thursday.

The deals signed Wednesday include payments for food cards for nearby families and investments for the social development of local communities, as well as technical improvements.

Signed with federal and state prosecutors as well as the state government and environmental authorities, they do not include a timeline for resumption of production at full capacity.

Hydro was technically ready to restart the closed capacity, Thuestad said, and would now concentrate on convincing the relevant Brazilian judge.

“It’s the right decision to reopen the facility,” especially given the tightness of the world’s alumina market, he said.

Hydro was ordered by Brazilian regulators in February to slash output by half at Alunorte after the company admitted to making unlicensed emissions of untreated water during severe rains.

Thuestad said more than 90 inspections had established Hydro did not cause any harmful pollution. The company has denied many of the prosecutors’ allegations and said there was no evidence of a lasting environmental effect.

However, Thuestad said the lesson Hydro was drawing from the incident was that it needed to improve its relations with local Brazilian communities and with authorities in the country. (Editing by Gwladys Fouche)

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