The lower court’s decision orders the companies to pay BRL 50 million in moral damages to Cainquiama for an alleged delay in the implementation of the Alunorte fuel switch project. The court’s decision also includes an obligation to demonstrate that the fuel switch project is being implemented at Alunorte.

Hydro confirms the fuel switch project is being implemented at Alunorte and denies the allegations set forth in the court’s decision, which will be appealed.

The extensive 2015 ICMS agreement with the State of Para included the commitment to implement a fuel switch project at the Alunorte alumina refinery. The fuel switch project involves replacing oil with natural gas in the refining process, and required a significant number of investments, some of which did not depend on Hydro to materialize. Among other things, the fuel switch commitment was conditional upon the building of a gas terminal in Para state by Gas do Para. Alunorte is successfully implementing the fuel switch project and started the consumption of gas in Q1 2024, as soon as the terminal was built, and gas was first made available by the gas supplier.

Hydro companies in Brazil hold all permits and licenses required to operate and, in implementing the fuel switch project, Alunorte will strengthen its current leadership position as one of the world’s low-carbon alumina producers. In addition, by bringing gas to the State of Para, the fuel switch project will act as an enabler to further development of the gas infrastructure in the region.