Norsk Hydro ASA started preparing to cut output from its Alunorte alumina refinery in Brazil by 50% from March 1, as ordered by the Secretariat of Environment and Sustainability of the state of Pará.
SEMAS plans to impose daily fines of about 500,000 Brazilian reais if production is not cut within the deadline.
"Contingency plans will be implemented to reduce the potential negative effect on customers," Norsk Hydro said in a Feb. 28 release.
The Alunorte facility is the world's biggest alumina refinery. It processes bauxite into alumina and has an annual production capacity of 5.8 million tonnes. The plant exports its products to 10 countries in the Middle East, North America and Europe.
SEMAS on Feb. 23 instructed the smelter to reduce the water level in the DRS1 bauxite residue deposit, after heavy rainfall Feb. 16-17 led to regional flooding and speculation about a leak at the smelter site. The secretariat said it would also impose daily fines of about 1 million reais until the refinery met the required water level.
Norsk Hydro reported that it achieved the 1-meter freeboard requirement Feb. 27 by increasing the number of pumps and the water treatment capacity.
Discussions with authorities continue, but it remains unclear what the company needs to do to resume full production at the refinery, Norsk Hydro spokesman Halvor Molland told Reuters.
As of Feb. 27, US$1 was equivalent to 3.25 Brazilian reais.
