Alunorte Ramps Up Production After Temporary Agreement with Gas Supplier

Norsk Hydro's Alunorte refinery in Brazil has resolved its production issue after reaching a temporary agreement with gas supplier CELBA. The refinery had reduced output to 50% of capacity earlier this week due to disruptions in availability.

The refinery, which has the capacity to produce 6.3 million metric tons of alumina per year, was forced to cut production despite already strained global aluminium supplies. The industry is currently facing constricted Middle East shipments and low inventories in LME warehouses, driving prices to their highest in seven weeks.

According to Norsk Hydro, the estimated production loss is 100,000 to 120,000 tonnes. The company has also received approval from Brazil's oil regulator to become a self-importer of gas and is pursuing a long-term solution for its gas supply.

The temporary agreement with CELBA will help mitigate the financial impact, which could range from $75 million to $100 million due to reduced production and purchasing gas above the contract price. Norsk Hydro's Alunorte refinery has now ramped up alumina production to full capacity.