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Hungary Mineral Mining and Metallurgy
The aluminum industry developed rapidly after World War
II
and in the late 1980s employed more than 40,000 workers.
The
production of bauxite (used in making aluminum) more than
doubled
since the war, reaching more than 3 million tons in 1986,
while
alumina (aluminum oxide) output totaled 856,000 tons in
the same
year. Increased bauxite production was depleting deposits
near
the surface, however, and costly deep mining had become
necessary. Conversion of alumina into aluminum is highly
energy
intensive, and a lack of inexpensive electricity prevented
Hungary from converting more than 25 percent of its
alumina
output. Therefore, Hungary had to import about 65 percent
of the
aluminum consumed by its factories each year. Under an
exchange
agreement signed in 1985, Hungary exported 530,000 tons of
alumina to the Soviet Union each year for smelting in
return for
205,000 tons of aluminum. In the late 1980s, Hungary
received
significantly less aluminum per unit of alumina than under
previous agreements, largely because the price of aluminum
had
risen against the price of alumina on world markets since
the
1960s. In the late 1980s, Hungary's aluminum-fabrication
industry
concentrated more on manufacturing semifinished and
specialized
products and less on bulk production of the metal in the
unfinished form. The major aluminum processing plant was
the
Light Metal Works at Szekesfehervar, which had a capacity
of
approximately 100,000 tons per year in the late 1970s.
Hungary
exported much of its bauxite, alumina, and aluminum to the
Comecon countries.
Soviet technology and raw-material inputs were key
factors in
the development of Hungary's iron and steel industry in
the
1950s. The large steel mills at Dunaujvaros in Feher
County, Ozd,
Miskolc, and Budapest have used local low-grade iron ore,
but
more than 80 percent of their raw-material input
originated in
the Soviet Union. In the late 1980s, the industry suffered
from
several major problems. First, Hungary's iron and steel
mills
were less cost effective than West European mills because,
among
other factors, Hungary had to pay to transport and process
Soviet
ore that had only a relatively low (45-50 percent) iron
content.
Second, the prices Hungary received for its iron and steel
exports to convertible-currency markets had fallen. These
exports
generated losses for the industry, but Hungary continued
the
trade for several reasons: the domestic market could not
absorb
enough output to maintain satisfactory use of the
country's mill
capacity, the state subsidized losses on metallurgical
exports,
and export income provided the industry with the grounds
to
increase wages. The industry underwent a sweeping
reorganization
as part of a 1987 restructuring program that included the
elimination of 2,400 jobs. Hungary produced no iron ore in
1986,
and analysts expected the country to reduce iron and steel
output
by up to 10 percent in 1988.
Data as of September 1989
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