Norsk Hydro Issues Second Force Majeure on Qatar Aluminium After Contract Termination
Overview of Norsk Hydro's Force Majeure and Contract Developments
By Tom Daly
Background of the Qatalum Joint Venture
LONDON, June 12 (Reuters) - Norsk Hydro has declared a second force majeure on aluminium sales from Qatar after its Qatalum joint venture unexpectedly terminated a marketing agreement with the Norwegian company, according to a notice reviewed by Reuters on Friday.
Hydro, which owns 50% in the 648,000 metric tons per year Qatalum project alongside Qatar Aluminum Manufacturing Co, known as Qamco, issued a first force majeure in early March after the outbreak of the war in the Middle East interrupted the plant's gas supply and Qatalum initiated a shutdown.
First Force Majeure and Plant Operations
That force majeure - a clause that frees parties from liability if any failure to meet supply obligations is due to events beyond their control - remains in place even though Qatalum subsequently received enough gas to operate at 60% of capacity.
Second Force Majeure and Contract Termination
A second force majeure was issued to Hydro's customers on Friday relating to its commercial arrangements with Qatalum.
Details of the Termination Notice
"Qatalum has notified Hydro that it terminated the agreement under which Hydro markets and sells Qatalum metal," the force majeure notice said, adding that Hydro disputed Qatalum's right to end the contract.
"Despite Hydro's efforts to make Qatalum withdraw its notice of termination, Qatalum has refused to do so and Qatalum has informed Hydro that it will not deliver metal under the relevant agreements," the notice added.
Impact on Hydro's Delivery Obligations
"Consequently, Hydro would currently not be able to fulfil its delivery obligations under the sales contract, even if the situation in the Middle East improves."
Market and Political Context
U.S. President Donald Trump said on Thursday that a peace deal with Iran to end the three-month-old war could be signed as soon as this weekend, although Tehran said it had not made a final decision.
Uncertainties and Responses from Stakeholders
It was unclear why Qatalum had terminated the agreement. Qatalum and Qamco, which is 51%-owned by state-run QatarEnergy, did not immediately answer calls and emails seeking comment on Friday, a non-working day in Qatar.
Future Outlook
The notice said it was not possible to estimate the duration or full impact of the force majeure but that Hydro would work to minimise disruption to customers.
(Reporting by Tom Daly; editing by Barbara Lewis)
