Norsk Hydro Faces Up to $210 Million in Costs Due to Gas Disruption at Alunorte

Norsk Hydro, a Norwegian aluminum and renewable energy company, has estimated that a disruption to natural gas supplies at its Alunorte refinery in Brazil could cost the company up to $210 million. The company revealed this estimate in a statement on Monday, citing ongoing issues with its gas supplier, CELBA, which notified Alunorte in August about disrupted gas availability.

The company expects the impact to range between $75 million and $100 million in the third quarter, primarily due to lower production levels and the need to purchase gas at higher spot-market prices. An additional financial hit of $90 million to $110 million is projected for the fourth quarter, stemming from gas arbitrage costs at the Alunorte refinery.

Since the notification, Alunorte has not received its contracted gas volumes and has been forced to buy gas on the spot market. Despite these challenges, the refinery had begun increasing alumina production toward full capacity after reaching a temporary agreement with CELBA in August. Earlier that month, production had been reduced to half of its capacity due to the supply disruptions.

Hydro emphasized that Alunorte does not anticipate further supply interruptions and is collaborating closely with CELBA to resolve the issue. The company noted that the final financial impact remains uncertain, depending on gas prices, contractual developments, and progress toward a long-term solution.