Island Aluminium Smelter To Close

by David Phillips
(Anglesey)

Anglesey Aluminium Metal (AAM) announces its Holyhead smelter will close in September when its electricity supply contract expires.

The island smelter employs over 500 people and gets its power from the local Wylfa nuclear power station, which is set to close in 2010.

Electricity counts for about one third of production costs and it seems that AAM has not been able to secure a viable new electricity source in time.

Joint owners Kaiser Aluminium (49 per cent) and Rio Tinto group (51 per cent) say they expect the Holyhead plant, which consumes about 12 per cent of electricity in Wales, to finally shutdown in September.

This comes after the plant had recovered from a serious fire last June in a transformer which led to a two thirds cut in capacity.

Rio Tinto says it is too early to speculate on the extent of possible job losses, and there will now be a period of consultation with staff.

It may be possible, according to AAM, to consider alternative activities at the Holyhead plant, such as smelt and recasting.

David Bloor, Managing Director at AAM, fully understands the profound impact of this decision on staff, their families and the local island community.

The company will look at all practical long term alternative options with local stakeholders, in line with community needs and the global market conditions.

Local MP Albert Owen is still hopeful that a new temporary power supply can be secured, saying that the social impact of Anglesey Aluminium closing will hit not just the island but reverberate across Wales and the wider UK economy.

The closure of the Holyhead plant comes against a significant fall in smelter capacity by aluminium producers across the world.

Rio Tinto and Alcoa Inc. , two major global producers, have had to close down plants and shelve new projects as the aluminium price has fallen over 40 per cent in the past year.

With falling world growth the demand for the metal used in airplane and car manufacture among many other applications has impacted down to the smelting stage of primary aluminium.

This news for the island smelter comes just when two German power companies E.ON and RWE are on the verge of building new nuclear plants in the UK including one at Wylfa.

Related Articles:

Holyhead smelter final closing in September, blow to island economy
Kaiser expects smelter closure
Counter proposal smelter hope
Renewed hope for Anglesey Aluminium
Gordon Brown smelter support
Government offers aluminium smelter help
Holyhead Biomass Plant Exhibition
Anglesey Aluminium wants biomass power
Avoiding Anglesey Smelter Shutdown
Prospects for Island smelter
Welsh Secretary visits Aluminium plant
Aluminium plant full output recovery
Smelter three month capacity cut
Aluminium smelter fire causes shutdown
Permanent closure Anglesey Aluminium

For more local news and stories about the island, subscribe to our free Anglesey Today Newsletter here. It's as easy as 1-2-3!

Comments for Island Aluminium Smelter To Close

Average Rating

Click here to add your own comments

Jan 20, 2009
Rating

Rio Tinto Alcan cuts more output
by: Shaun

Rio Tinto Alcan has just announced that it will cut its aluminiumm production by a further 6 per cent or 230,000 tonnes, and cut 1,100 jobs.

This means that Rio Tinto will have slashed its aluminium production by 450,000 metric tonnes or 11 per cent since the last three months of 2008.

Dick Evans, the CEO of Rio Tinto Alcan, said this difficult decision was needed because of the severe world economic downturn.

Stockpiles of aluminium keep building up on the London Metal Exchange, with around 2.53 million metric tonnes in warehouses, the highest level since September 2003.

And all this growing inventory has seen the price of the metal crash by 36 per cent in 2008, and yesterday, LME aluminium was trading at $1,424 per tonne. Today it fell a further 3.8 per cent to $1,370 per tonne, the lowest since the summer of 2003.

And it isn't just the Anglesey Aluminium smelter and its workforce that is being affected.

Rio Tinto Alcan has also said that its 63 year old Beauharnois smelter near Montreal, Quebec, is to be permanently closed by June 2009 with the loss of 800 employees and 300 contractors.

This Canadian plant uses the out dated Soderberg method of smelting, and had to be phased out to comply with environmental regulations.

Alcan has also decided to cut alumina production, this is the product in the process between the bauxite ore and smelted metal.

Here it will have a temporary output cut of 25 per cent at its Vaudreuil smelter in Canada, as well as a 15 per cent reduction at Gardanne in France, between them this makes up about 500,000 tonnes of alumina.

The company will also postpone a $10 billion joint venture in Saudi Arabia to build a new smleter, as well as sell its interest in a Chinese joint venture, as the Rio Tinto Group desperately tries to reduce its debt of around $40 billion.

Jan 15, 2009
Rating

look ahead
by: Simon

let's look ahead on Anglesey. there will be lots of jobs coming with a new Wylfa station. we need new roads, and the nuclear station has to have a lot of cement.

the builders will have to stay somewhere, and eat and drink. good b&b and cafe opps.

Click here to add your own comments

Return to Anglesey Aluminium Latest.