(Bloomberg) — In the aluminum industry, closing a smelter is an agonizing decision. Once power is cut and the production “pots” settle back to room temperature, it can take many months and tens of millions of dollars to bring them back online.
Yet Norsk Hydro ASA is preparing this month to do exactly that at a huge plant in Slovakia. And it’s not the only one — European production has dropped to the lowest levels since the 1970s and industry insiders say the escalating energy crisis is now threatening to create an extinction event across large swathes of the region’s aluminum production.
The explanation lies in aluminum’s nickname: “congealed electricity.” The metal — used in a huge range of products, from car frames and soda cans to ballistic missiles — is produced by heating raw materials until they dissolve, and then running an electric current through the pot, making it massively power intensive.
One ton of aluminum requires about 15 megawatt-hours of electricity, enough to power five homes in Germany for a year. Some smelters are protected by government subsidies, long-term electricity deals or access to their own renewable power, but the rest face an uncertain future.
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