Reversing course, shares of Alcoa (AA) are sliding while Century Aluminum's (CENX) stock is on the rise after Norsk Hydro (NHYDY) announced that its alumina refinery Alunorte was granted an exceptional authorization by federal environmental agency IBAMA to utilize its press filter technology in its processing of bauxite residues.

ALUNORTE GRANTED EXCEPTIONAL AUTHORIZATION: Norsk Hydro announced over the weekend that its alumina refinery Alunorte was granted an exceptional authorization, on October, 5, by federal environmental agency IBAMA to utilize its press filter technology in its processing of bauxite residues, which will extend the life of its DRS1 bauxite residue disposal area and allow Alunorte to continue operations on safe conditions. Following IBAMA's decision, Alunorte will be working with SEMAS, Secretary of State for Environment and Sustainability, to obtain the authorization to use the press filter on DRS1, the company said. This filter provides stackable residues with less water content than the drum filter, it added. After receiving this authorization, Alunorte will be able to re-start the operation at 50% of capacity. "We are ready to re-start our operations and we thank for all the support that we have received from the authorities and society. We are now making every effort to go back to producing as we maintain our dialog with authorities to resume full production", said John Thuestad, head of Hydro's Bauxite and Alumina business area. Thuestad adds that resuming 50% production at Alunorte would also allow Hydro's bauxite mine Paragominas and its joint-venture primary aluminium smelter Albras to continue operating at half capacity, as opposed to being fully shut down as a consequence of Alunorte being idled. Following the news, last week that Hydro was preparing for full curtailment of Alunorte operations, shares of Century Aluminum fell while Alcoa rose.

GOLDMAN SAYS BUY NORSK HYDRO: Over the weekend, Goldman Sachs analyst Eugene King upgraded Norsk Hydro to Buy from Neutral following the company's announcement that Alunorte had been granted an exceptional authorization by Brazil's federal environmental agency. The analyst said he views this as a positive development for the company given it significantly de-risks earnings for next year, which had come under focus as the market took the bearish view that 100% closure of Alunorte would not only impact earnings at the Bauxite and Alumina division but also crimp margins at the primary aluminum division.

PRICE ACTION: In afternoon trading, shares of Alcoa have dropped almost 8% to $38.90, while Century Aluminum's stock has gained over 8% to $10.78.