“We haven’t made any decision to reduce production,” Alro’s general manager Gheorghe Dobra said in a statement.
An official of Alro’s trade union told Mediafax earlier Tuesday that the company plans to cut back production by 20% because it couldn’t reach an agreement with Hidrolectrica on electricity deliveries.
Several tens of workers were guarding one of Alro’s smelting processing facilities for fear that it might be shut down and they would lose their jobs.
Alro, the largest aluminum smelter in southeast Europe, employs 2,500 staff and, according to trade union representatives, approximately 1,600 of them could be fired if the smelting unit closes.
The company buys most of its electricity from state-run hydropower producer Hidroelectrica, based on bilateral contracts signed between 2001 and 2003. The contracts are subject to an international inquiry after the European Commission said Alro might have benefited from illegal state aid when purchasing electricity from Hidrolectrica at seemingly below-market prices.
Representatives of Alro and Hidroelectrica met last week to renegotiate the contracts, but they couldn’t reach an agreement. Moreover, Hidrolectrica announced it could activate a force majeure clause for its electricity deliveries due to drought.
“Alro is considering several options in case this measure is enforced,” the aluminum smelter said.
Alro is 84.18%-owned by Dutch-based Vimetco, while the remaining shares are distributed among various holders.