RIO DE JANEIRO, July 26 (Reuters) - Brazilian authorities are studying the possibility of inking a social and environmental deal with Norsk Hydro, after its Alunorte alumina refinery was accused of polluting the environment, signalling a potential warming in relations between the government and the Norwegian aluminum producer.
Norsk Hydro was ordered by Brazilian regulators in February to slash output from Alunorte, the world’s largest alumina refinery, after the company admitted to making unlicensesd emissions of untreated water during severe rains that month.
The company has, however, denied many parts of prosecutors’ allegations and argued there was no evidence of a lasting environmental impact.
The production cut triggered cutbacks at its nearby Albras aluminium plant and a scramble by customers for supplies.
On Thursday, prosecutors for the state of Para, where the plant is located, said a deal was also being considered the state government and federal prosecutors, and would include social and environmental obligations on their part as well as the company’s.
The statement clarified that such a deal would not include a resumption of the halted production and did not provide a timeline for a deal, adding that it still needed to be evaluated by the state government.
Norsk Hydro said this week that the timing for resuming full output at its Alunorte alumina refinery remains uncertain, but that it could be achieved between October and the middle of 2019.
Alunorte transforms bauxite to alumina, which is turned into aluminum at huge smelters. Founded in 1995, Alunorte produces 5.8 million metric tonnes of alumina a year, according to the website of Norway’s Norsk Hydro. (Reporting by Marta Nogueira and Alexandra Alper Editing by Marguerita Choy)