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The decision to terminate primary aluminium production at Slovalco comes in
response to adverse framework conditions and high electricity prices, which show
no signs of improvement in the short term. The casthouse in Slovalco will
continue its recycling operation, serving customers in the region with 75,000
tonnes of recycled aluminium annually.
“Slovalco is a well run and modern primary aluminium plant, well placed to serve
European customers with high quality aluminium products. I regret that it has
not been possible to secure continued operation of the primary production at the
plant,” says Ola Sæter, head of Hydro’s primary production and chair of
Slovalco’s Board of Directors.
“Slovakia has not implemented 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,” says Sæter.
Slovalco curtailed 40 percent of its 175,000 tonnes per year primary capacity in
late 2021 and early 2022, and is currently running at 60 percent of its
capacity. The primary production lines at Slovalco will be mothballed and may
resume operations at a later stage if the market and framework conditions allow.
The closure process will commence shortly and be completed no later than the end
of September 2022.
Correspondingly, Slovalco has decided to unwind remaining hedge positions for
power, metal and raw materials. This will result in a total positive effect on
adjusted EBITDA of around NOK 1.6 billion (100 percent) in the second half of
2022. The total cost of the production termination is limited
The decision to close primary production will affect 300 of Slovalco’s full time
employees, in addition to a reduced need for services from contractors and
suppliers in the region. A process has started to assist affected employees.
Slovalco is a fully consolidated aluminium smelter in Hydro, owned 55.3 percent
by Hydro and 44.7 percent by Penta Investments Group. Slovalco has an annual
production capacity of 175,000 tonnes of primary aluminium and a casthouse
capacity of approximately 250,000 tonnes.
Investor contact:
Line Haugetraa
+47 41406376
Line.Haugetraa@hydro.com
Media contact:
Halvor Molland
+47 92979797
Halvor.Molland@hydro.com
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