Challenges remain for Alunorte alumina refineryTags: alumina, brazil, mining
The Alunorte refinery in Barcarena, Pará state, in northern Brazil, is not likely to return to full alumina production in the near future. The company cut production from full rates after heavy rains in early 2018 raised concerns about leakage from retention ponds and potential contamination to surrounding areas.
Alunorte has maintained that no leakage was found, but federal authorities are yet to give the green light for a return to normal operations. Caustic soda trade flows could be impacted by the refinery’s lower production, given production is currently at half of its typical capacity.
A dam in Broumadilho owned by Vale, the largest producer of iron ore and nickel in the world, broke January 25, releasing a slurry of iron ore sludge that killed more than 150 people and contaminated water downstream. A separate dam ruptured in 2015, resulting in another deadly accident at a Vale-BHP Group joint venture in Samarco.
The public has been expressing growing concerns about the danger to inhabitants and the environment after a spate of similar incidents across Brazil. Vale earlier this month said it was taking precautions by evacuating about 200 people near an inactive mine in Minas Gerais. Sources have cited ongoing problems such as easing regulations to drive economic development along with understaffing as causes for these incidents.
In the wake of January’s accident, industry participants expect Alunorte to face lingering issues in other parts of Brazil. Last week, parent company Hydro sought to assure the community that Alunorte was no longer a danger by saying the company was making sure its facilities could withstand any amount of rainfall, no matter how extreme.
Alunorte in January said that Semas, the environmental agency in Pará, issued a technical note attesting that it could safely resume normal operations and lifted the production embargo. A study 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. A federal embargo, however, remains in force and must be lifted before Alunorte can restore full production.
The following table, including numbers from ClipperData, highlight that caustic soda imports from the US to Alunorte declined by 590,000 liquid metric tons last year from 2017 levels. Brazil’s total imports, however, declined only by 44,000 liquid metric tons for the same period. US supplies of caustic soda that were previously designated for Alunorte continue to search for new destinations, disrupting historical trade flows and driving down caustic soda prices.
The table also contains data from Brazil’s industry association Abiclor, noting that domestic production and consumption of caustic soda declined in 2018. The information from Abiclor is in dry metric tons (dmt) and considers only domestic production.
Most caustic soda is sold and shipped as a 50 percent solution in water. The price of the product is established by the solid caustic soda content in dry metric tons (dmt). When the caustic soda solution is shipped in bulk in ships or in tanker trucks, the shipped volume is registered for the total including the water content.