Norsk Hydro’s Slovak aluminium smelter cuts output to 60%

PRAGUE (Reuters) – Slovak aluminium smelter Slovalco, majority owned by Norsk Hydro, reduced its output further, to about 60%, due to high costs of power and emissions allowances and lack of government compensation, the company said on Monday.

The reduction completes an output cut announced on Dec. 30, and it could last throughout 2022, Slovalco said as it blamed the government for low compensation for energy-demanding industries compared to other EU states.

Central Europe’s only smelter with annual capacity of 175,000 tonnes of aluminium products, Slovalco shut 44 pots at the weekend after shutting 47 in late 2021 and now has 135 out of 226 pots in operation, it said.

“Electricity prices for the next year are 150 euros per megawatthour, that is three times more than last year,” Chief Executive Milan Vesely said in a statement.

“Under current prices, the company would generate a loss of tens of millions of euros next year,” the company said, adding that the risk of a complete shutdown was the highest in its history.

The company employs over 450 people and 2,500 other jobs are directly tied to its operation. It said it would not cut jobs until a decision on the future is made.

It called for usage of funds from sales of emissions allowances to be used to help industries under threat.

Slovakia’s Economy Minister Richard Sulik is due to meet with Slovalco management on the issue, his ministry said.

A surge in power and natural gas costs across Europe last year has led to output reductions at smelters, chemical plants and other affected industries.

The Slovalco plant, 55.3% owned by Hydro, had already cut its capacity to 80% in 2019 due to lower demand. The production has not fully recovered before the current reduction.

(Reporting by Jan Lopatka and Robert Muller; Editing by Tomasz Janowski)