02/15/2019 | 11:11am EST

Norsk Hydro ASA -This weekend it will be one year since heavy rainfalls flooded the region of Barcarena in northern Brazil, including the Hydro-owned Alunorte alumina refinery.

We wanted to take this opportunity to explain what has happened since those events including what we as a company has done as well as an update on the actions of the Brazilian authorities.

Since the rainfall event in February 2018, Hydro has implemented operational changes including specific improvements at Alunorte and changed the way we collaborate with local communities and behave as a neighbor. We have come a long way since February 2018 and we know that more needs to be done.

Following the heavy rainfalls, communities around the alumina refinery were concerned that the flooding could be contaminated by overflows or leaks from Alunorte's bauxite residue deposits. As Brazilian environmental agencies and other authorities conducted investigations of potential environmental damage from our bauxite residue deposits, Alunorte was required to reduce production by 50 percent which we immediately implemented.

Investigative conclusions: No leaks or overflows

Multiple investigations have concluded that there were no leaks or overflow from Alunorte's bauxite residue deposits. These include investigations by Ibama - Brazilian Institute of the Environment and Renewable Natural Resources (a federal environmental agency under the Brazilian Ministry of Environment) and Semas - the Secretary of State for Environment and Sustainability (the environmental agency in the state of Para).

During and following the heavy rainfall, Alunorte discharged partly treated rainwater from the refinery area into the Para river, as exceptional measures in an emergency. Alunorte tasked the environmental consultancy SGW Services to review the potential environmental impact of the discharges, and they concluded that there was no indication or evidence of contamination to the nearby local communities.

Increased robustness and better dialogue

Through dialogue with local communities it became apparent that we have not lived up to their expectations - and our own ambitions. What we heard from local communities is that we were not close enough, and the information we provided wasn't good enough. This is not who we aspire to be, and we are working hard to build and earn their trust.

In addition, we must make sure Alunorte can withstand any rainfall - no matter how extreme. Our neighbors should have the confidence in our operations that Alunorte does not pose any danger to them.

Since the flooding we have increased the robustness of Alunorte and committed to investing BRL 100 million (NOK 250 million) over ten years to support collaboration for social change through the Sustainable Barcarena Initiative which was announced in April 2018. We hope this initiative will build trust and improve our collaboration with local communities.

The Alunorte organization is dedicated to continue this collaboration, and have worked hard to strengthen the operational capabilities at Alunorte. We have built new basins for water storage at the plant. These increase the storage capacity by 350 percent, while capacity at our water treatment facility will be increased by 50 percent. These measures are getting us closer to resuming full operations at Alunorte.

Safe to resume operations

In January 2019, the environmental agency in the state of Para, Semas, issued a technical note attesting that Hydro Alunorte can safely resume normal operations and lifted the production embargo. A study carried out by professors from the Federal University of Campina Grande also concluded that Alunorte, from the point of view of water management, can safely produce at 100 percent of its capacity. The embargo of the Federal Court remains in force and must be lifted before we can restore full production.

We have created an overview of the Brazil situation, key events and our efforts. On these pages we try to give details and answers to questions you may have about the situation in Brazil and what we are doing.

Contact:

Halvor Molland

Tel: +47 92979797

https://www.marketscreener.com/NORSK-HYDRO-1413211/news/Norsk-Hydro-ASA-One-year-after-the-flooding-in-Barcarena-Brazil-what-has-happened-and-what-re-28017763/