Slovak PM seeks EU support to restart major aluminum plant

The Slovak government will seek to reopen the mothballed Slovalco aluminum plant, formerly one of Europe's biggest raw aluminum producers, Prime Minister Robert Fico said in a Jan. 13 press conference.

Fico said during the press conference at the manufacturing site in Ziar nad Hronom, central Slovakia, that he regarded aluminum as a strategic material for both Slovakia and the rest of Europe, and that production should be relaunched to reduce non-European imports.

The shutdown of Slovalco, which had a maximum capacity of around 200,000 metric tons/year, was announced in August 2022, following previous production reductions due to high power prices that made the output uncompetitive. "This is an example of green madness in Europe," Fico said during the press conference.

Europe's raw aluminum production capacity has now narrowed to around 1.2 million mt/year after the closure of some 1.5 million mt of capacity, with 70%-80% of European demand, amounting to 6 million-7 million mt/year, now met by non-European imports, mostly from China and Africa, Fico said.

"This [Slovalco] plant was one of the technical and environmental leaders in Europe," Fico added, saying that its CO2 footprint was around one-fifth of some of the aluminum producers now delivering to Europe.

Fico said moves to reopen Slovalco could either follow an EU or domestic course, which would have to tackle the basic problem of high European power prices. Fico said he preferred a European solution because of the enormous costs that Slovakia would face if it were to subsidize production alone. "Industry in the EU cannot survive when we have energy prices that are four or five times higher than in the rest of the world," he added.

Fico suggested one way of supporting aluminum and other European heavy industry production would be to offer a long-term "holiday" from the payment of carbon emissions allowances. Another way, suggested by Czech Prime Minister Andrej Babis in a bilateral meeting last week, would be to put a ceiling of around Eur30-40/mt on emission allowances, currently trading at around Eur90/mt, Fico added. European funds from carbon allowance sales could alternatively be used to help producers such as Slovalco, Fico said.

Fico said his attempts to help European heavy industry cope with high power prices are backed by the Czech Republic, Hungary and Italy. He said his specific demand for measures would be sent to EU leaders and European Commission President Ursula von der Leyen, and should be raised at an upcoming informal council meeting.

The Slovak government itself intends to sign a memorandum of understanding with Slovalco, which could help guarantee at least 10 years of further aluminum production, the minimum time frame needed for a resumption of operations, Fico said. Local managers, who have continued to maintain the facility, said production could resume as soon as the summer if all necessary conditions are fulfilled.

Slovalco is majority-owned by Norway's Norsk Hydro, with the local Slovak industrial holding company Penta holding a 44.7% stake. Around 70% of Slovalco's former production was destined for export, with one-third used locally, mostly by the auto industry.

Platts, part of S&P Global Energy, assessed the Daily Aluminum Duty Paid In-warehouse Rotterdam Premium at $335-$350/mt Jan. 12, with a midpoint of $342.50/mt, unchanged week over week.

Supply risks in view

The restart of the Slovalco smelter could somewhat ease aluminum supply risks for the region.

In Europe, where aluminum output has been disappointing over the last several years, the supply has recently been further challenged by production cuts in Iceland and Mozambique, the two largest aluminum importers into the EU, which account for a 10% share, Natalie Scott-Gray, senior metals analyst at financial services company StoneX, said in a short-term market outlook released Jan. 12.

In October 2025, Iceland's 300,000 mt/year Norðurál Grundartangi aluminum smelter temporarily stopped production on one of its potlines due to an electrical equipment failure.

The outage of Century Aluminum's Grundartangi smelter has taken offline two-thirds of production for the next 11-12 months, Scott-Gray said.

This was followed by South32's failure to secure a new electricity supply agreement with Mozambican hydropower plant operator Hidroeléctrica de Cahora Bassa and South African utility Eskom, and the ensuing decision to place on care and maintenance, from March 2026, Mozal Aluminium, Mozambique's sole aluminum smelter with 580,000 mt/year capacity,

The proposed restart of the Slovakian smelter comes at a time when the aluminum trade is picking up, amid concerns over future output in the largest aluminum-producing country, China, where a self-imposed capacity cap of 45.5 million mt is expected to be reached this year.

"Aluminum price posted a gain of 11.8% over October-December, taking the spot as the third best-performing base metal over the quarter," said Scott-Gray, and adding that in Europe, in the quarter ahead, focus will remain on aluminum inventory availability, given that the introduction of the Carbon Border Adjustment Mechanism and record premiums in the US could put another constraint to imports into the EU.

The LME three-month aluminum price, at $3,185/mt on Jan. 12, has gained $170/mt since the beginning of the year and is now $316/mt higher month over month.