Production at Hydro’s Paragominas bauxite mine returned to normal in late December 2019, following a closure of around 10 days—the result of a power supply failure caused by an overturned transmission tower. Production at the company’s associated Alunorte alumina refinery had also been reduced by 50–70%.
This is not the first time global markets have been affected by reduced output from Hydro in recent years. Production from Brazil, a major bauxite and alumina supplier, recovered through 2019 following environmental embargoes at Hydro operations, with the company only returning to full production levels in H2 2019.
The Brazilian government set a 50% embargo on Hydro’s bauxite operations following exceptional rainfall in early 2018, safeguarding against the potential threat of overflow at the residue disposal site. No overflow took place (although there were some minor unauthorised discharges of rainwater from the site of the alumina plant); however, the embargo was held in place until May 2019. Meanwhile, an embargo on the use of its DRS2 bauxite residue disposal site was lifted in September 2019, while the company’s existing site, DRS1, nears capacity and could be full by the end of 2020.
Other alumina producers in Brazil and elsewhere are understood to have increased sales of alumina hydrate to replace lost production from Alunorte through 2018/2019, including Hindalco and Alcoa. Alunorte is an important source of wet hydrate to consumers in the USA and this market was particularly affected. With the return of Alunorte to the market at full production, some of these supply changes (but perhaps not all), are expected to revert.
Roskill’s NEW report Non-metallurgical Bauxite & Alumina: Outlook to 2029, 10th Edition was released in December 2019 and includes analysis of recent industry trends on supply, demand, trade and prices, as well as providing forecasts over the next decade to 2029 and profiles of the main producers.
Roskill will be speaking at the 2020 FastMarkets Bauxite & Alumina Conference, to be held in Miami, Florida in March.