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Home » Metals Giant Suffers Extensive Cyber Attack

Metals Giant Suffers Extensive Cyber Attack

Metals Giant Suffers Extensive Cyber Attack
March 19, 2019
Bloomberg

Norsk Hydro ASA, one of the world’s biggest aluminum producers, suffered production outages after a cyber attack affected operations across Europe and the U.S.

The company couldn’t immediately detail how much output had been impacted but said the so-called potlines, which process molten aluminum and need to be kept running 24 hours a day, had switched to manual mode.

Some operations at plants where metal is fashioned into finished products for use in cars, planes and other manufactured goods, have been temporarily stopped, said spokesman Halvor Molland. The company is doing everything possible to fix the problem, but isn’t ready to give any forecasts yet, he said by phone. Aluminum futures gained on the London Metal Exchange.

Norway’s security agency said Hydro was the subject of a ransomware attack called LockerGoga, according to state-broadcaster NRK that cited unidentified people. A spokesman for Hydro declined to comment on the ransomware report.

The attack is the latest to hit the commodities sector, where disruptions can quickly cascade down the supply chain. Prior to Norsk Hydro companies from zinc smelter Nyrstar NV to Saudi and Russian oil giants Aramco and Rosneft PJSC, shipping company AP Moller-Maersk A/S and agriculture trader Archer-Daniels-Midland Co. had been also hit by cyber attacks.

Hydro is a leading supplier of aluminum products in North American and European markets, providing highly-specialized parts to industrial customers. Making those finished products can be highly automated, and involve extensive digital monitoring to ensure product quality, according to Colin Hamilton, managing director for commodities research at BMO Capital Markets Ltd.

“They’ll probably have to halt pretty much everything in the short term as they work on a back-up plan,” Hamilton said by phone from London. “Operationally, this is distinctly challenging.”

While a sustained outage at its downstream plants could cause turmoil for customers in end-use markets, prices are unlikely to react unless there’s a disruption to the supply of metal from the company’s primary production lines, Hamilton said.

Potlines usually have multiple redundant systems to operate, including in many cases full manual back-up operation, as the furnaces can not be turned off while the hot metal is inside.

Cyber Threat

Cyber attacks have become a major threat to the highly integrated global supply of metals and minerals. Zinc smelter Nyrstar suffered a major intrusion targeting processing and mining operations earlier this year, while A.P. Moller-Maersk A/S, the owner of the world’s biggest container shipping company, lost about $200 million to $300 million because of a cyber attack in June.

The cyber attack on Hydro began late Monday, escalating during the night, a spokeswoman for the Norwegian National Security Authority said by phone. The state agency is helping the company and sharing information with international bodies, yet it’s too early to comment in detail, she said.

Hydro, which also has major utility assets, said on its Facebook page that power plants are running normally on isolated IT systems. While the company’s website was down on Tuesday, Hydro “has established Facebook as our main external communication channel,” it said.

The attack comes as Hydro is in a protracted struggle to restart its Alunorte alumina refinery in Brazil amid claims of environmental damage after flooding. The disruptions have weighed on the company’s shares, which are down 25 percent over the past year.

Norsk Hydro has more than a dozen aluminum facilities in Europe, from Norway to the U.K., including those producing primary metal or using aluminum extrusion, which is a technique used to transform an alloy into specialized parts. The company’s market share in the extrusion segment is around 20 percent in Europe and 23 percent in North America.

Hydro shares slid 0.6 percent to 35.63 kroner as of 12:43 p.m. in Oslo.

Hydro also this week announced that Hilde Merete Aasheim will take over as its new chief executive officer on May 8.

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