Chief Executive Officer Svein Richard Brandtzaeg. Photo: Hydro.com
June 26 (Bloomberg) – Norsk Hydro ASA, Europe’s third- largest aluminum producer, suspended the closure of a German smelter while it holds talks with the government over proposed financial assistance.
Annual output at the Neuss smelter has been reduced to 50,000 metric tons and will be held at that level while talks with the government and labor unions continue, Hydro spokesman Halvor Molland said today by mobile phone from Oslo, where the company is based. Hydro’s previous plan was to “completely mothball” the plant, which has capacity of 230,000 tons a year, by the end of last month, he added.
“We are waiting to see whether the package will have a positive effect on Neuss,” Molland said. “We cannot wait endlessly and we are anxious to see more detail of what this plan really is and how it will be administered.”
Germany agreed in principle last week to make 40 million euros ($56.3 million) of aid available to help aluminum, zinc and copper producers overcome the effects of the economic slowdown, Reuters reported June 24.
Hydro, which has also curtailed production at smelters in Norway and Slovakia, said in April it may close Neuss because of electricity costs and weaker demand. Chief Executive Officer Svein Richard Brandtzaeg said in May that the company was evaluating whether to make the cutback at Neuss permanent,
Rival aluminum companies including United Co. Rusal, the largest producer, Alcoa Inc. and Rio Tinto Group have also reduced output after plunging demand from automakers and builders sent prices to a seven-year low and stockpiles soaring.
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