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Norsk declares force majeure for Qatalum deliveries

Oslo, August 15, 2010

Norwegian aluminium producer Norsk Hydro said it had declared force majeure for aluminium deliveries from its Qatalum smelter in Qatar after a power failure delayed the plant's ramp-up schedule.

Declaring force majeure frees companies from contractual obligations due to events beyond their control.

Qatalum, a 50/50 venture between Qatar Petroleum and the Norwegian aluminium firm, had a sudden shutdown of production last week due to a power outage.

'In certain markets affected by the Qatalum stoppage, we unfortunately have had to declare force majeure,' Norsk Hydro spokesman Thomas Knutzen told Reuters.

Hydro said the force majeure would affect its clients mainly based in Asia, the Middle East and to some extent in the United States.

'The largest (impact) will be towards Asia,' Knutzen said, adding that the notice was issued on Wednesday.

Some analysts said the force majeure notice was unsurprising given that the power outage caused a significant drop in temperature in the plant's reduction cells.

The company says full capacity will not be reached this year as had been expected. 'The declaration of force majeure is really just formalising the earlier news that production will be less,' said Stephen Briggs, an analyst at BNP Paribas.

Qatalum, with a design capacity of 585,000 tonnes of primary aluminium, was running at some 60 percent of capacity prior to the outage, the Hydro spokesman said.-Reuters

Tags: Qatar | aluminium | Norsk Hydro | Qatalum | Norwegian | force majeure |

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