Brazil court upholds partial shutdown at Hydro Alunorte alumina refinery

FILE PHOTO: A ship navigates at Para river as alumina refinery Alunorte, owned by Norwegian company Norsk Hydro ASA, is pictured in Barcarena, Para state, northern Brazil March 5, 2018. REUTERS/Ricardo Moraes/File Photo

RIO DE JANEIRO (Reuters) - A federal court in Brazil once again upheld a decision by a state court forcing aluminum-maker Norsk Hydro to run its Alunorte alumina refinery, the world’s largest, at half capacity, state prosecutors said on Wednesday.

The decision, made on Tuesday, is part of a months-long environmental dispute with Brazilian authorities, after the metals maker admitted to making unlicensed emissions of untreated water during severe rains in February.

As a result, the company was ordered to slash output by half at the refinery, located in the Brazilian Amazonian state of Para.

The federal court also upheld a ban on the company using a second waste deposit area near the plant, state prosecutors said in a statement on Wednesday. A violation of either measure would result in a fine of 1 million reais ($267,465.50) per day, prosecutors added.

“It’s our understanding that this is a necessary procedural step the court must take,” a Norsk Hydro spokesman said. “It ratifies a decision from a lower court, which is required before a potential further processing of the case, but we don’t know whether they plan to take any further steps.”

A federal judge already upheld the state court decision in February forcing Norsk Hydro to cut output.

At full capacity the plant can produce some 6.4 million tonnes of alumina, or 10 percent of the world’s capacity outside China. Alunorte transforms bauxite into alumina, which is turned into aluminum at huge smelters.

Alunorte’s output, enough to produce more than 3 million tonnes of aluminum per year, is sold to metal plants around the world, including Hydro’s own facilities in Norway and Brazil.

($1 = 3.7388 reais)

Additional reporting by Terje Solsvik; Editing by Chizu Nomiyama