In an interview with Dennik N, Milan Veselý, CEO of Slovalco, Slovakia's sole aluminum plant, hinted at the possibility of restarting the facility's primary production, which has been halted for a year due to high electricity costs. Despite a recent dip in electricity prices and the potential impact of EU sanctions on Russian aluminum imports, Veselý remains cautious, noting that a full recovery in production is still some distance away.
Slovalco, part of the Norwegian group Norsk Hydro and domestic investor Penta, has been limited to minor recycling activities since the shutdown. The Slovak government's efforts to revive production, including talks with the new Environment Minister Tomáš Taraba, have yet to yield a definitive plan for resumption.
The aluminum industry, vital for its lightweight properties in automotive and construction sectors, faces challenges from cheaper electricity in other EU states, aiding their competitive edge. Veselý did not disclose ongoing negotiations for long-term electricity contracts but emphasized the need for a minimum 10-year agreement to ensure viable production margins.
The company's strategy for reactivation includes securing favorable aluminum and electricity prices, leveraging increased industrial rebates from emission payments, and potentially benefiting from the new government's enhanced support post-energy crisis. Restarting the full operation, expected to take nine months, will require re-negotiating contracts, retraining employees, and mobilizing suppliers, with a goal to return to the original workforce of 500.
Slovalco's re-entry into the alumina market and securing sufficient raw materials pose additional challenges, compounded by the logistics of importing from diverse sources. The company, part of the multinational Norsk Hydro, remains confident in regaining its customer base and is prepared for a restart cost of nearly €100 million, supported by financial reserves from a significant profit in 2022.
The future of Slovalco, impacted by the high energy costs and insufficient state support, hangs in the balance, with the management maintaining the facility in a ready state for a feasible restart within a reasonable financial framework. The remaining 190 employees, including 40 key personnel for primary aluminum production, reflect the scaled-down operations during this period of uncertainty.
