Sovakia signs memorandum to restart Slovalco aluminum plant
TL;DR
Slovakia signs a memorandum to restart the Slovalco aluminum plant, aiming to revive production with state or EU support to address high electricity costs. The plan includes lobbying for ETS exemptions and may require significant investment, with critics questioning its prioritization.
Tags
Sovakia signs memorandum to restart Slovalco aluminum plant
Slovakia Signs Memorandum to Restart Slovalco Aluminum Plant
Slovakia’s government has signed a long-term memorandum with Slovalco, a key aluminum producer, to revive its Žiar nad Hronom smelter, which halted primary aluminum production in early 2023 due to soaring electricity costs. Prime Minister Robert Fico emphasized the strategic importance of the plant, which historically contributed up to 200,000 tonnes annually—nearly 20% of Europe’s domestic aluminum output— before its closure. The memorandum outlines a decade-long support framework, including potential state subsidies or EU-level policy adjustments, to secure competitive electricity pricing and restart operations according to the agreement.
The shutdown, driven by energy costs exacerbated by carbon pricing under the EU Emissions Trading System (ETS), left Slovalco’s 450 employees largely laid off and its core furnaces idle as reported. Fico has prioritized lobbying the EU for a temporary suspension of ETS charges for energy-intensive industries, arguing that carbon costs embedded in electricity prices render aluminum production unviable according to Fico. If unsuccessful, Slovakia may pursue domestic subsidies, though Fico acknowledged the financial burden, estimating €100 million in upfront investments to restart all furnaces.
Market conditions have improved since the shutdown, with aluminum prices nearing record highs ($3,000/tonne) and electricity costs significantly lower than 2023 peaks. Slovalco’s management has indicated production could resume within months if financing and power contracts are secured according to company statements. However, critics question the prioritization of Slovalco over other struggling industries and highlight the company’s profitability in 2022 through surplus electricity sales, raising concerns about taxpayer-funded support.
The success of the revival hinges on EU approval for regulatory flexibility. Without a temporary ETS exemption, Slovalco’s restart would face steep costs, with carbon charges compounding production expenses as noted. The memorandum’s implementation will test Slovakia’s ability to balance industrial revival with fiscal responsibility and EU compliance.
The Slovak Spectator, 13 January 2026: The Slovak Spectator, 13 January 2026
alcircle.com, 2026: alcircle.com, 2026
alcircle.com, 2026: alcircle.com, 2026
