Norsk Hydro said on Wednesday its Slovalco aluminium joint venture had struck an agreement with the Slovak government to partially restart production after a four-year shutdown, with the deal including a new long-term power supply contract.
The pact paves the way for the restart of 75,000 metric tons per year of smelting capacity, with production expected to resume in the fourth quarter of 2026, Hydro said.
Restoring the remaining 100,000 tons of capacity would depend on conditions beyond 2030 and additional power contracts, it added.
The resumption of primary aluminium production at the plant, in Ziar nad Hronom in central Slovakia would be a boost for the European market, which has been left short of metal by the closure of the Mozal smelter in Mozambique, the EU’s new carbon tax and war-driven supply constraints in the Gulf.
Slovalco – owned 55.3% by Norway’s Hydro and 44.7% by Central Europe-focused Penta Investments Group – was forced to stop primary aluminium production in September 2022 as high power prices left the joint venture facing financial losses.
The deal sets out the “long-term framework conditions” for aluminium production, including a power purchase pact with state-owned hydropower utility Vodohospodarska Vystavba and a compensation scheme for indirect carbon costs under the EU Emissions Trading System (ETS), Hydro said.
Slovalco will invest 100 million euros ($14 million) to resume operations, which would support more than 200 jobs, it added in a statement after a signing ceremony in Bratislava on Wednesday.
($1=0.8777 euros)
(Reporting by Tom Daly; Additional reporting by Jan Lopatka; Editing by Elaine Hardcastle and Clarence Fernandez)
