Sør-Norge Aluminium (Søral) primary aluminium plant in Norway has signed electricity contracts with Agder Energi, Lyse, Statkraft and Hydro for the long-term annual supply of up to 2.6 terawatt hours (TWh) of electricity in Norway over an eight-year period, starting in 2013.
“We are pleased that Søral has been able to secure power supply, paving the way for continued operations at the plant. We have worked hard to achieve this, and we are happy that all pieces came together in the end,” says CEO Per Øyvind Sævartveit at Søral.
The combined contracts, together with necessary clarifications concerning implementation on CO2 compensation, will secure the basis for continued commercial operations at the Søral aluminium plant at Husnes, owned by Rio Tinto Alcan and Hydro. The plant’s current power supply contract expires in December 2012.
“This is a milestone for Søral and for Hydro as part owner, and very important for our Norwegian aluminium operations,” says Hydro President and CEO Svein Richard Brandtzæg. ”It shows that Norwegian industry and power producers jointly can find solutions that ensure that Norway keeps its position as a location for aluminium production with clean, renewable power. In our view, this is good for Hydro, for Norway as an industrial nation and for the global climate.”
Søral curtailed one of two potlines following the financial crisis in 2009, and is currently producing around 90 000 tonnes aluminium per year. The plant’s production capacity with both potlines in operation is around 185 000 tonnes per year. At full production the plant employs around 340 people. Currently, 250 are working at the plant.
The renewed power sourcing will not lead to an immediate increase in production at Søral.
“With renewed power sourcing, we will continue production with one potline until the owners and Board of Directors decides otherwise,” says Sævartveit at Søral. “The power contracts allow for an increased production at a later stage, should market conditions improve. In the meantime, we will continue our efforts to further reduce our cost base and improve efficiency,” he says.
Søral is owned by Rio Tinto Alcan (50.0%), Hydro (49.9%) and others (0.1%).