Norsk Hydro To Shutter Slovalco Aluminium Plant Due To High Power Prices

Norsk Hydro To Shutter Slovalco Aluminium Plant Due To High Power Prices

Norwegian aluminium producer Norsk Hydro ASA announced this week the closure of its Slovalco aluminium plant in Slovakia due to high electricity prices.

In a statement released by Hydro, the firm says that “adverse framework conditions” also contributed to the site’s closure. As to electricity prices, Hydro said that it does not expect any relief in the short term.

To date, Slovalco has already cut production by 40 percent in two capacity closures late last year and early this year. Hydro will mothball the primary aluminium production lines at the plant but will keep open the possibility of restarting in the future if conditions improve. The closure process will begin this month and is expected to be completed by the end of next month.

“Slovalco is a well run and modern primary aluminium plant, well placed to serve European customers with high quality aluminium products,” commented Ola Sæter, head of Hydro’s primary production and chair of Slovalco’s Board of Directors. “I regret that it has not been possible to secure continued operation of the primary production at the plant.”

“Slovakia has not implemented the competitive EU CO2 compensation framework. This has prevented Slovalco from entering long term power contracts and the plant’s current contract expires at the end of 2022. Due to the current Slovak framework conditions and the European power prices, Slovalco would incur substantial financial losses if it continued its operation beyond 2022.”

Closure of the 175 thousand metric tons per annum plant will also mean the end of 300 jobs at the plant, and Hydro has promised to aid those affected by the closure.

Norsk Hydro, which was founded in 1905, financed by the Swedish Wallenberg family and French banks, began its life named Norsk hydro-elektrisk Kvælstofaktieselskab (literally, “Norwegian hydro-electric nitrogen limited”) by Sam Eyde. The Norwegian government owns approximately 40% of the company at the present time. Norsk Hydro is one of the largest aluminium companies in the world, with plants in Rjukan, Raufoss, Vennesla, Karmøy, Høyanger, Årdal, Sunndalsøra, and Holmestrand. Norsk also has several plants abroad.