Europe Loses Another Smelter as Energy Prices Spiral

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe has lost another smelter as Norway's Norsk Hydro confirmed that the Slovalco aluminum smelter in Slovakia will close primary production by the end of September, impacting 300 full-time jobs.

It comes hot on the heels of a decision by Nyrstar N.V. (Belgium) to stop production at its 315,000-tonne-per-year zinc smelter in Budel, Netherlands, beginning September 1 until further notice. For additional information, see August 18, 2022, article - Nyrstar to Halt Production at Budel Zinc Smelter in Netherlands in September.

Norsk Hydro said that the closure will be completed by the end of September at the 175,000-tonne-per-year plant, blaming energy costs and "framework conditions...which show no signs of improvement in the short term."

"Slovalco is a well run and modern primary aluminum plant, well placed to serve European customers with high quality aluminum products," explained 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."

The company said that the decision will not impact its casthouse at Slovalco, which will continue its recycling operation, serving customers in the region with 75,000 tonnes of recycled aluminum annually.

The main aluminum plant had already been operating below full capacity with a 40% curtailment of its 175,000 tonnes per year primary capacity in late 2021 and early 2022. It has been running at 60% capacity since. The primary production lines at Slovalco will now be mothballed and "may resume operations at a later stage if the market and framework conditions allow".

In Norway, the company also has been hit by strike action at Hydro Sunndal, the largest primary aluminum plant in Europe with an annual capacity of more than 400,000 tonnes of aluminum, 500,000 tonnes of casthouse products and 80,000 tonnes of anodes. Workers will start strike action in the coming week and disruptions are expected for at least a month. The company stated: "The strike at Hydro Sunndal will affect production at the primary metal plant. According to the shutdown agreement, 20% of production will be shut down during the first four weeks."

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