Electricity supplies for steelmaker ISD Dunaferr will be guaranteed for a temporary period thanks to a government decree instructing the electricity operator not to disconnect a supplier from the grid, a ruling Fidesz lawmaker has said.
Lajos Mészáros told a press conference on Thursday that Dunaferr, which employs thousands of people, operated in a very energy-demanding sector and has been weighed down by energy price hikes caused by the Russia-Ukraine war. The company has accumulated significant debt, and E.on had been planning to disconnect ISD Power, ISD Dunaferr’s current electricity supplier, from the grid at 12.30pm on Thursday, which would have resulted in an emergency, he added.
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The situation has been resolved for the time being, with energy supplies guaranteed until operations can be securely phased out in areas where a sudden stoppage could cause damage or industrial accidents, he said.
Mészáros noted that ISD Power also supplies electricity to other companies as well as industrial water and steam.
He said Dunaferr’s years of troubles were due to a botched privatization carried under Fidesz’s governing predecessors, and it had lost ground during the boom in the steel industry, by failing to make investments that would shield if from crises and raise its environmental protection profile.
The government recently said it was examining how to save the troubled steel plant which recently shut down both blast furnaces, but it was constrained by the fact that Dunaferr is a private company. A further complication is that it is impossible to establish who the actual owner of the plant is, while the company has no legitimate management.
Donau Brennstoffkontor GmbH (DBK), which has been supplying coke for production for decades, unexpectedly refused to deliver, the company said, explaining its move to shut down the furnaces. The company’s survival depends on maintaining production and restarting its blast furnaces, but this depends on securing the right amount and quality of coke within a week, it added. Technical risks associated with a longer shutdown and the huge costs of restarting operations mean a quick resumption is indispensable to the company’s future viability, the company said.
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