Norsk Hydro, one of the world’s largest aluminum producers, may leave Slovakia in favor of Hungary, news portal Mandiner reports.
The Slovak aluminum industry’s Norwegian subsidiary in the Slovakian town of Garamszentbenedek (Žiar nad Hronom) may soon stop production, unless the government yields to its demands for higher energy price subsidies.
At the end of September, Norsk Hydro, the majority owner of the smelter, announced that if the Slovak government does not provide more help to compensate for the increased energy costs for energy-intensive plants, the plant in Kramszent will close by the end of 2022.
Another co-owner of the plant, the Penta investment group, pointed out that the government had not given more aid to keep the plant running despite its promises. Slovak Economy Minister Richard Sulík said he still wants to fight for the factory, but “his options are limited.”
Three months have passed since then, and it is increasingly likely that the plant employing 450 people directly and an additional 2,000 indirectly in the region will close.
However, the Slovak public has expressed its displeasure that in addition to the possibility of closing the Slovak plant, the Norwegian group had announced a major investment in aluminum production in Hungary.
An aluminum recycler is planned for Székesfehérvár in central Hungary, where the aluminum extracted from waste would be made into automotive components. The investment amounts to €88 million and will create 70 new jobs.
No major investment has been made in Slovalco in Garamszentkereszt since a complete modernization of the plant in the 2000s. If the Norwegians withdrew from the aluminum plant in Garamszentkereszt, the minority Slovak investor group, Penta, would not be able to realistically operate it.
Unless the company receives some kind of compensation, they can post massive losses at current energy prices. They say they will close the company at the end of next year when the electricity contracts, pre-purchased at one fifth of the current price, will run out.