Anglesey Aluminium Metal, Holyhead, seeks new Energy source

Holyhead based Anglesey Aluminium Metal (AAM) Limited faces some very difficult choices over the next two to three years.

With the impending closure of Wylfa Power Station on Anglesey in 2010, the aluminium smelter urgently needs to secure an alternative supply of electricity.

The existing continuous 250 MW electricity baseload supply contract with Wylfa has been a long term one, so providing stability and certainty.

With the closure of the Wylfa nuclear plant, that certainty framework disappears and AAM is urgently searching for a viable solution.

Are you looking for the news on the latest developments? Try here to find what you're looking for...

Now you can keep up to date with latest local news and articles by subscribing to our free Anglesey Today Newsletter. Just complete the simple form here. It's as easy as 1-2-3!

Enter your E-mail Address
Enter your First Name (optional)

Don't worry — your e-mail address is totally secure.
I promise to use it only to send you Anglesey Today Newsletter.

Click here to see latest News

Click here to add your story or latest news item

Jointly owned by Rio Tinto (51%) and US-based Kaiser Aluminium and Chemical Corporation (49%), Anglesey Aluminium Metal has been a major supplier of aluminium metal for extruding, rolling and re-smelting to UK and European markets since it started at Holyhead in 1971.

With over 500 highly paid posts at the plant, closure would be a severe blow to the local economy, which will need to readjust to the closure at Wylfa.

According to Anglesey Aluminium Metal MD, David Bloor, there are essentially four options on the table. Firstly, the smelter could negotiate and secure another long term (10-15 years) contract on the open electricity market as in the past.

Mr Bloor, however, is not sanguine on propsects for such a deal because of the inherent risk in forward pricing.

Alternatively, Anglesey Aluminium Metal could opt for shorter term - say 2 yearly- contracts on the open market, but the question would be whether such terms could be secured as profitably as in the past.

If the above two possibilities are not feasible, the third choice would be to have on-site generating capacity.

The company has commissioned feasibility studies into alternative energy sources on site, including building a biomass power station.

Providing a secure, dependable and steady supply of wood chips would require significant quantities of wood.

There would also have to be consideration given to securing sufficient sources of supply and the lead times from felling, drying out and processing of the wood chips, not to mention the transport logistics.

If the above three options are not workable, the fourth option is simply to switch off the power and shut the gates. Such a scenario fills local people with gloom, but Mr Bloor said this possibility had to be considered.

After all,the plant along with the jetty in Holyhead harbour, has been an icon of the town's industrial base since its introduction in 1971.

Just consider that while AAM has doubled its production to over 140,000 tonnes since it started in 1971, it has also achieved remarkable results on its carbon emission targets.

Against a Kyoto target of a 12.5% reduction in greenhouse gases by 2012, the company has cut its carbon equivalent emissions by more than 50% since 1990.

And its amazing to reflect on such an outstanding achievement in a relatively energy intensive industry in the week that G8 leaders gather in Germany to discuss a post-Kyoto (2012) framework with tougher greenhouse gas emission targets.

In fact, Angela Merkel, German Chancellor and current G8 President, has suggested an ambitious plan of 50% reduction in greenhouse gases by 2050.

If the above three options are not workable, then the fourth is simply to switch off the power and shut the gates.

Such a scenario fills local people with gloom, as the Holyhead plant has been an icon of the town's industrial base since its introduction in 1971.

It's ironic that closure is possible as globally we have seen a surge in demand for aluminium along with other industrial metals such as copper, zinc and iron.

With no apparent let-up in demand from China, India and other emerging markets, this seems a good time to be producing aluminium.

Indeed GFMS Metals Consulting notes that global primary aluminium in April 2007 climbed to 3 million tonnes, a 12% rise over 12 months, and European demand also seems to be holding up well.

Mr Bloor believes that so long as the reationship between aluminium and electricity prices translates into a profit, even a small one, then Anglesey Aluminium Metal at Holyhead will continue going forward.

His ideal scenario is for Wylfa B to be given the green light and for a similar partnership deal as before to be struck with the new nuclear generator.

So let's hope the recent Energy White Paper and nuclear consultation lead to a favourable climate for new nuclear build.

We can then expect energy giants like E.ON and EDF Energy to be fighting for the contract to design, build and operate Wylfa B, and Rio Tinto Anglesey Aluminium Metal will have another lease of life.

What Other Visitors Have Said

Click below to see contributions from other visitors to this page...

Emirates Smelter Attracts Island Workers 
Emirates Aluminium (EMAL)is seeking to recruit former Anglesey Aluminium Metal (AAM) workers from the recently closed island smelter at Holyhead. …

Holyhead Smelter Closure Devastating for Island 
Anglesey Aluminium smelter at Holyhead will cease production in September, with around 300 people set to lose their jobs. The company, owned by Rio …

Renewed Hope for Anglesey Aluminium 
The future of Anglesey Aluminium (AAM)at Holyhead remains in the balance after more discussions yesterday between Peter Hain, the Welsh Secretary, the …

Government Offers Smelter Jobs Hope 
According to Anglesey MP Albert Owen, 540 jobs at the Holyhead aluminium smelter may be saved by a financial package from Government at Westminster and …

Holyhead Smelter Biomass Plant Exhibition 
Anglesey Aluminium Metal (AAM) have just held a public exhibition in Holyhead showing plans for a 300 MW biomass renewable energy plant, made up of two …

Aluminium Smelter Seeks Biomass Plant 
Anglesey Aluminium Metal(AAM) is looking at building a biomass power plant at its Holyhead smelter. Around 500 jobs are at risk following a decision to …

Welsh Secretary Visits Island Aluminium Smelter 
Welsh Secretary Paul Murphy is visiting the Anglesey Aluminium smelter at Holyhead to discuss the future options for the plant with local managers, workers …

Could Canatxx Gas Turbine Plant Rescue Island Smelter? 
With the prospect of losing around 500 jobs at Anglesey Aluminium smelter, would it be possible for Canatxx at Amlwch to build a power plant as originally …

Island Aluminium Smelter To Close  
Anglesey Aluminium Metal (AAM) announces its Holyhead smelter will close in September when its electricity supply contract expires. The island smelter …

Aluminium Smelter May Close in 2009 
The Anglesey Aluminium smelter outside Holyhead is likely to close if it cannot find a new electricity supplier, according to Bloomberg. Still recovering …

Kaiser Expects Anglesey Aluminium Smelter to Close Not rated yet
Kaiser Aluminium (NASDAQ:KALU) expects Anglesey Aluminium smelter to close in September, according to its 2009 second quarter statement, despite a generous …

Counter Proposal Hope for Anglesey Aluminium Not rated yet
Kaiser Aluminium and Rio Tinto Alcan have put a counter proposal forward that would see Anglesey Aluminium operating with only one potline, effectively …

Gordon Brown Supports Anglesey Smelter Rescue Not rated yet
With 400 local jobs at risk, Prime Minister Gordon Brown fully supports rescue plans at Anglesey Aluminium Metal(AAM)in Holyhead. Despite a generous …

Could Anglesey Aluminium Avoid Permanent Shutdown? Not rated yet
The aluminium smelter at Holyhead is on the verge of returning to full production following a five month interruption caused by a fire in a transformer …

Permanent Closure of Holyhead Aluminium Smelter Still Possible Not rated yet
Kaiser Aluminium Corporation which owns 49 per cent of Anglesey Aluminium Metal at Holyhead ( with Rio Tinto (51 per cent))has suggested that the smelter …

Aluminium Smelter To Resume Full Output By Year End Not rated yet
Following a fire in one of its electricity transformers in June, the Anglesey Aluminium smelter outside Holyhead should be back to normal output by year …

Aluminium Smelter Capacity Reduced For Three Months Not rated yet
The Rio Tinto owned (51%) aluminium smelter at Holyhead on Anglesey will be operating at reduced capacity for about three months following a recent fire …

Fire Shuts Down Anglesey Aluminium Plant Not rated yet
Five fire engines had to fight a huge blaze at the Anglesey Aluminium Metals Ltd (AAM)smelter outside Holyhead on Thursday evening. Reports suggest …

Return to Energy from Anglesey Aluminium Metal

Anglesey Today

Share this page:

Enjoy this page? Please share with friends. Here's how....

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.