Hungary Takes Control of Alumina Plant, Detains CEO on Sludge

Hungary will take control of an alumina plant and detained its chief executive after one of the company’s waste reservoirs burst, unleashing toxic sludge that killed at least eight people, premier Viktor Orban said.

The government is taking over management of Magyar Aluminium Zrt. and freezing its assets, Orban told lawmakers today in Budapest. State oversight will protect jobs, ensure Mal pays damages and enable authorities to hold accountable those responsible for the accident, he said.

“We have good reason to suspect that there were some who were aware of the weakened state of the reservoir wall and chose to do nothing,” Orban said. “Accountability, in a strict and fair manner, is in the public’s interest.”

The reservoir burst on Oct. 4, releasing almost as much hazardous waste as the volume of oil that spilled into the Gulf of Mexico when a BP Plc rig exploded earlier this year. The sludge, created by the production of alumina, is highly alkaline and contains toxic materials, including arsenic and lead.

Parliament today approved a bill allowing the government to take control of private companies in disaster situations, according to the legislature’s website.

‘Public Endangerment’

Photographer: Balint Porneczi/Bloomberg

Prime Minister Viktor Orban will address Parliament at 1 p.m. in Budapest to make “very important announcements,” Deputy Premier Zsolt Semjen told M1 television today. Close

Prime Minister Viktor Orban will address Parliament at 1 p.m. in Budapest to make... Read More

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Photographer: Balint Porneczi/Bloomberg

Prime Minister Viktor Orban will address Parliament at 1 p.m. in Budapest to make “very important announcements,” Deputy Premier Zsolt Semjen told M1 television today.

Police detained Zoltan Bakonyi, Mal’s chief executive, on suspicion of “public endangerment causing multiple deaths” and of causing environmental damage, police spokeswoman Monika Benyi said by phone. The first crime is punishable by as many as eight years in prison and the latter by up to three years, she said. A court has 72 hours to decide on whether to order his arrest.

Bakonyi submitted a confession to authorities and lodged a complaint because of his detention, Benyi told MTI news service.

Mal spokeswoman Andrea Nemeth didn’t answer repeated calls to her mobile phone by Bloomberg. The company has “always met to the letter” all safety requirements for the reservoir, it said in a statement posted on its website today.

Mal is Hungary’s only alumina refiner and the country’s second-largest company in the aluminum industry, according to its website. It employs 1,100 people in and around the Ajka refinery and exports 80 percent of the alumina it produces, which accounts for 12 percent of the European market, it said.

Emergency crews are racing to build a dike to contain a possible new spill from the damaged reservoir, which the country’s top environmental official says is likely to collapse.

‘Immense Effort’

“The building of a dam continued with immense effort overnight and will continue in the course of the day to contain a possible spill,” in Kolontar, the emergency services agency said today in a statement on its website. The agency expects the dam will be completed tomorrow, MTI reported, citing Gyorgy Bakos, the head of the Veszprem county emergency services.

A corpse was uncovered under the red sludge today, taking the death count to eight, MTI said, citing emergency services spokesman Tibor Dobson. One of the victims died in hospital on Oct. 8 and several other bodies were also found in the sludge.

Doctors are treating 50 people, including one in life- threatening condition and seven with critical injuries, according to the emergency services agency’s website.

Kolontar, about 160 kilometers (100 miles) southwest of Budapest, was evacuated on Oct. 9 because of concern the cracked walls of the reservoir may give way. The government called the spill the country’s “worst ecological disaster.” The contamination doesn’t threaten the Danube river or other countries, authorities said.

‘Unsalvageable’ Reservoir

The red sludge reservoir, which belongs to Mal, a closely held company owned by Hungarian individuals, is “unsalvageable” because of its cracked walls, Zoltan Illes, the state secretary for the environment, said yesterday according to MTI.

The reservoir released as much as 700,000 cubic meters (25 million cubic feet) of sludge last week. An estimated 4.9 million barrels (27.5 million cubic feet) of crude oil spilled into the Gulf of Mexico over almost three months after BP’s Deepwater Horizon rig exploded in April.

The cracks in the reservoir wall have stopped, Gyorgy Bakondi the head of the country’s emergency services, said on the agency’s website. Officials are also probing all similar structures in Hungary and so far haven’t found any problems, he said.

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net.

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net.

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