The company also referred to US 10% tariffs on aluminium imports and sanctions against Russian aluminium producer Rusal, with which Hydro has "multiple business relations".

Brazilian authorities ordered the company to halve production at its majority-owned Alunorte refinery in February after concerns were raised over flooding and contamination following heavy rainfall.

Alunorte's primary bauxite source Paragominas and Hydro's part-owned subsidiary Albras aluminium plant have also halved production.

"The process to resolve the situation in Brazil is challenging and has taken longer than expected," president and CEO Svein Richard Brandtzæg said as the company released its June quarter results yesterday.

"We have implemented measures that enable Alunorte to operate safely also going forward, but the timing for resuming full production remains uncertain."

The company has said internal and external studies found there was no overflow from the bauxite residue deposit areas, no contamination to nearby local communities or any significant environmental impact from Alunorte as a result of the heavy rainfall.

Hydro's earnings before financial items and tax decreased to NOK2.7 billion (US$0.3 billion) from 2.9 billion in the previous June quarter, with the impact of production cuts partially offset by higher all-in metal prices and alumina prices, plus improved results from its downstream and energy divisions.

The company said the global primary aluminium market was moving towards a deficit in 2018, and larger than earlier forecast, driven by slower than expected supply growth.

It said it was initiating mitigating actions to address the Rusal situation but did not expect any significant negative impact on its operation and financial performance in the short term.

Hydro's shares closed up 3.43% yesterday but remain down about 24% year-to-date.