ALRO Slatina might temporarily stop part of production

ALRO Slatina employees have launched a protest against the dismissals. Photo: Archive Agerpres.

The only aluminum producer in the country, ALRO Slatina, has a long-term contract with Hidroelectrica, valid until 2018, through which it receives cheap energy below the established power exchange.

At this point, however, the company beneficiates only of half of the commitment entered into the contract because of the dryness, which forced the power producer to reduce deliveries to its customers since several months.

ALRO is the largest aluminum producer in Central and Eastern Europe and one of the largest energy consumers of the country, and if the company does not contract what the plant manager calls "viable energy costs", it could temporarily stop some of the production capacities.

If the situation continues, the company aims at the operational restructure and temporary cessation of the less effective production capacities.

A reduction of personnel does not come yet into question - the company manager guarantees it - but only a six-month postponement of the signing of collective contracts.

Until the ensuring of the energy independence, meant to happen in mid year, along with construction of its own steam power plant, ALRO is forced to provide the necessary lack by buying energy from other markets, such as the Balance Market or the Market for the Next Day, which are more expensive and considered penalty markets.

The ALRO manager also says that the situation is complicated by the fact that the following cheap energy producers – the steam power plants – have chosen at this time to sell energy from these expensive markets and not from the Opcom exchange (the Romanian power market operator), where very small quantities are traded, completely insufficient to the aluminum producer.

The General Director believes that Hidroelectrica can lift the warranty in case of emergency because the Danube is at a normal level at this time.

An estimation of the Institute of Hydrology and Water Management on Wednesday shows, however, that the Danube flow is decreasing.

At present, ALRO is also targeted by the European Commission, which checks the contracts with Hidroelectrica for the receiving of energy at preferential prices, suspected to be a state aid.

Translated by: Gabriela Moateru

MA Student, MTTLC student, Bucharest University