Hydro was ordered to halve production at its 92.1%-owned Alunorte refinery in February, with the company then making management changes this month as it addressed the "challenging situation" - declaring force majeure and being fined BRL20 million (US$6.1 million) for alleged polluting activities.
The company admitted on Sunday it had used Canal Velho to discharge pH-treated rainwater from the factory area into the Pará river but said it had no indications of leaks or overflow from its bauxite residue deposit areas, adding that authorities were notified twice during the discharge period but local communities were not.
Yesterday, Hydro said an investigation had found cracks in a pipeline taking effluent from the DSR1 bauxite residue deposit area to the water treatment station.
Preliminary findings from its internal task force also found water had discharged from an overflowing wastewater holding pond into Canal Velho, in addition to the rainwater release, and that a power failure at the plant on February 17 led to a release of caustic soda that mixed with rainwater before entering the pond and overflowing into the canal.
Hydro said it had been ordered by the public prosecutor of Pará to take measures within 48 hours, including repairing the cracks and blocking the Canal Velho entrance, and it was taking action within the deadline.
"The preliminary findings from the internal task force shows that we do not have the full overview of the situation and the course of events," Hydro president and CEO Svein Richard Brandtzæg said.
"I will evaluate the situation thoroughly and revert with more information in due time."
An external review is due in the first week of April.
Hydro shares closed down 2.2% yesterday, representing a drop of 19.65% year-to-date.
