The deal ensures that SPL, which is classified as hazardous waste because it contains fluorides (among other things) is turned into rock wool, an important component of fireproof insulation.

Under the new contract, Hydro will separate the carbon-rich material from the SPL and deliver it to Rockwool's pre-processing plant in Germany where the carbon is crushed and then used in the production of rockwool.

Kristin Morkved, manager of Hydro's SPL project said that Rockwool's production process destroys any harmful elements in the SPL, making the contract between the two companies 'a very good environmental option'.

Rockwool's Peter Logtved said that both companies will gain from the project and so will the environment.

"What used to be a hazardous waste now becomes a valuable resource," Logtved said.

Hydro's executive management had previously set a target to reduce 2010 waste levels to landfill by 60% by 2020. In addition, the primary metal business is targeted to recycle 70% of annual waste also by 2020.

In addition to helping preserve the environment, the Rockwool deal – which runs initially until the end of 2013 – will also save NOK 5 million.

Prior to the Rockwool deal, Hydro's Norway-based smelters used to deliver waste to disposal sites operated by NOAH based at Holmestrand in Vestfold County.